Question
Product A is normally sold for $15.25 per unit. A special price of $14.50 is offered for the export market. The variable production cost is
Product A is normally sold for $15.25 per unit. A special price of $14.50 is offered for the export market. The variable production cost is $12.00 per unit. An additional export tariff of 10% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order.
Prepare a differential analysis on whether to reject (Alternative 1) or accept (Alternative 2) the special order in order to answer the following questions:
Blank 1: What is the amount of Profit (loss) per unit in the Differential Effects (Alt. 2) column? If required, round your answer to two decimal places.
Blank 2: Should they accept or reject the special order?
Blank # 1 | |
Blank # 2 |
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