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Problems (Group B) 25-34B LMS, Inc. manufactures stadium seat cushions. LMS's contribution Accepting or rejecting a special sales order margin incone statement for the most
Problems (Group B) 25-34B LMS, Inc. manufactures stadium seat cushions. LMS's contribution Accepting or rejecting a special sales order margin incone statement for the most recent month contains the fol- lowing data: Sales in units 31,000 $434,000 Sales revenue Variable expense5: 293.000 107,000 200,000 234,000 Manufacturing Marketing and administrative Total variable expenses Contribution margin Fixed expenses: Manufacturing 126,000 90,000 Marketing and administrative Toral fixed expenses 216,000 SE18,000 Operating income continued 1290 Chapter 25 Underwood Company has offered $9 per unit for 5,000 stadium seat cushions, which is below the normal sale price of $14. Acceptance of the order will not increase any of LMS's marketing and administrative expenses. The LMS plant has enough unused capacity to manufacture the additional cushions. Requirements 1. Prepare an incremental analysis to determine the change in operating income if LMS accepts the special sales order. Should LMS accept the order? (pp. 12531254) 2. Identify long-term factors LMS should consider in deciding whether to accept the special sales order, (p. 1255)
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