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Sampson Industries has an annual plant capacity of 74,000 units; current production is 57,000 units per year. At the current production volume, the variable cost
Sampson Industries has an annual plant capacity of 74,000 units; current production is 57,000 units per year. At the current production volume, the variable cost per unit is $33.00 and the fixed cost per unit is $4.30. The normal selling price of Sampson's product is $44.00 per unit. Sampson has been asked by Dexter Company to fill a special order for 13,000 units of the product at a special sales price of $23.00 per unit. Dexter is located in a foreign country where Sampson does not currently operate. Dexter will market the units in its country under its own brand name, so the special order is not expected to have any effect on Sampson's regular sales. Read the requirements. - X Requirements 1. How would accepting the special order impact Sampson's operating income? Requirement 1. How would a Should Sampson accept the special order? er? Complete the following increm 2. How would your analysis change if the special order sales price were to be Inter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decre $39.00 per unit and Sampson would have to pay an attorney a fee of $19,000 to make sure it is complying with export laws and regulations relating to the special order? Incremental Analysi Revenue from special order Less expenses associated wit Less: Variable manufacturing Print Done Contribution margin Less: Additional fixed experisus ass Increase (decrease) in operating income from the special order Sampson accept the special sales order because it will operating income. Requirement 2. How would your analysis change if the special order sales price were to be $39.00 per unit and Sampson would have to pay an attorney a fee of $19,000 to make sure it is complying with export laws and regulations relating to the special order? (Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin and/or operating income from the special order.) Total Order Incremental Analysis of Special Sales Order Decision (13,000 units) Revenue from special order Less expenses associated with the order: Less: Variable manufacturing costRequirement 2. How would your analysis change if the special order sales price were to be $39.00 per unit and Sampson would have to pay an attorneyr a fee of $19,000 to make sure it is complying with export laws and regulations relating to the special order? (Enter a "D" for anyr zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin andior operating income from the special order_} Total Order Incremental Analysis of Special Sales Order Decision (13,000 units} Revenue from special order Less expenses associated with the order: Less: Variable manufacturing cost Contribution margin Less: Additional fixed expenses associated with the order Increase {decrease} in operating income from the special order Sampson I" accept the special sales order because it will 1' operating income
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