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sells to wholesalers 200,000 packages per year of Christmis etok.ies Kringle Products manufactures and 5.00 per dozen. Annual costs for the production and sale of

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sells to wholesalers 200,000 packages per year of Christmis etok.ies Kringle Products manufactures and 5.00 per dozen. Annual costs for the production and sale of this quantity are shown in the following table: Direct materials Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses A new wholesale has offered to buy 30 the wholesaler's of the costs of this additional business reveals the following: $240,000 60,000 200,000 80,000 55,000 $635.000 000 packages for $3.50 each. These packages would be marketed under good name and would not affect Kringle Products's sales through its normal channels. A study Direct materials costs are 100% variable. Per unit direct labor costs for the additional units would be 50% higher than normal because their production would require overtime Forty percent of the normal annual overhead costs are fixed at any production level from 150,000 to 300,000 units. The remaining 60% of the annual overhead cost is variable with volume. Accepting the new business would involve an additional 10% sales commission on the new order. Accepting the new business would involve no additional administrative expenses pay at 1 times the usual labor rate. . Prepare a differential analysis comparing the two alternatives of accepting and rejecting the special order, along with a difference column. REQUIRED a) Yes No b) Should Kringle accept the order

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