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Sampson Industries has an annual plant capacity of 75,000 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 75,000 units; current production is 57,000 units per year. At the current production volume, the variable cost per unit is $31.00 and the fixed cost per unit is $4.50. The normal selling price of Sampson's product is $46.00 per unit. Sampson has been asked by Karey Company to fill a special order for 13,000 units of the product at a special sales price of $28.00 per unit. Karey is located in a foreign country where Sampson does not currently operate. Karey will market the unils in ils 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. Requirement 1. How would accepting the special order impact Sampson's operating income? Should Sampson accept the special order? Complete the following incremental analysis to determine the impact on Sampson's operating income if it accepts this 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 Requirements Less expenses associated with the order Less: Variable manufacturing cost Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) operating Income from the special order 1. How would accepting the special order impact Sampson's operating income? Should Sampson accept the special order? 2. How would your s change if the special order sales price were to be per would to pay an attomey a fee $10,000 to make sure it is complying with export laws and regulations relating to the special order? $45.00 dur anal Print Done
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