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S REMAINING Alba Co. manufacture and sales Kitchen equipments for the first 8 months of 2021, the company reported the following operating results while operating
S REMAINING Alba Co. manufacture and sales Kitchen equipments for the first 8 months of 2021, the company reported the following operating results while operating at 70% of plant capacity and producing 80,000 units. Sales Cost of Goods Sold Selling and administrative expenses Net income Amount 2,400,000 1,900,000 300,000 200,000 Fixed manufacturing costs for the period were $80,000 and the fixed selling and administrative expenses $80,000. In July, normally a slack manufacturing month, Alba co. receives a special order for 8,000 kitchen articles at $27 each from the IKEA. Acceptance of the order would increase variable selling and administrative expenses by $1.00 per unit because of shipping costs but would not increase fixed manufacturing costs and fixed selling and administrative expenses. Required: A1 A-1 What is the financial advantage (disadvantage) of accepting the special order from the IKEA? Should Alba Co. accept the special order? Explain your answer. Assume that all the conditions remain unchanged, what will be the financial advantages (disadvantage), if Alba Co. buys a A-2 Required A-1 A-2 A-3 A-4 What is the financial advantage (disadvantage) of accepting the special order from the IKEA? Should Alba Co. accept the special order? Explain your answer. Assume that all the conditions remain unchanged, what will be the financial advantages (disadvantage), if Alba Co. buys a special tool for $3,800 to polishing kitchen equipments? On the bases of (A-2) situation, Should Alba Co. Accept the Special order? Explain your Answer. Assume Alba Co. anticipates selling only 70,000 units of Kitchen equipments to regular customers next year. At what selling price for the 8000 kitchen articles would Alba Co. be financial indifferent between accepting or rejecting the special order from the IKEA
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