Sherene Ne manages a company that produces wedding gowns. She produces both a custom product that is made to order and a standard product that is sold in bridal salons Her accountant prepared the following forecasted income statement for March, which is a busy month Huber of dresses Sales revenue Materials Labor Machine depreciation Heath other productions Marketing and distration Total costs Operating proti Custo Standard Dresses Dresses 10 20 50 540,000 125.000 $78,000 59,600 37,800 $17.600 19.000 3.600 28.600 580 280 360 4.000 2. 1.000 600 1.6 2.600 7.500 $65 $13,60 4.600 Ms Neady has orders for the 10 custom dresses reflected in the March forecasted income statement. The depreciation charges are for machines used in the respective product lines Machines depreciate at the rate of St per hour based on hours used, so these are variable costs on March cutting and sewing machines are expected to operate for 850 hours, of which 580 hours will be used to make custom dresses. There is for the building space, which has been leased for several years at 56,600 per month The tent heat ind light are allocated to the product lines based on the amount of floor space occupied A valued customer, who is a wedding consultant has asked M. Nil for a special favor. This customer has a client who wants to get momed in early April Ms Nils company is working at capacity and would have to give up some other business to make this dress She got renvege on custom orders already agreed to, but she can reduce the number of standard dresses produced in March to 10 Ms. Nu would lose permanently the opportunity to make up the lost production of standard dresses because she has no unused Capacity for the foreseeable future. The customer is willing to pay $23.800 for the special order Materials and labor for the order wil cost 55 800 and 59 800, respectively. The special order would require 130 hours of machine time M. Nils company would save 140 hours of machine time from the standard dress business given up Rent heat and light and other production costs would not be affected by the special order Required 0-1. Calculate the differential operating profitons .-2. From an operating profitos perspective for March should Me Nill accept the order? b. What is the minimum price Ms NS should accept to take the special order? Cumplete this question lry entering your in the tabs Requieu. 0-1. Calculate the differential operating profit (loss). 0-2. From an operating profit (loss) perspective for March, should Ms. Nili accept the order? b. What is the minimum price Ms. Nili should accept to take the special order? Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 ReqB Calculate the differential operating profit (loss). (Select option "increase or decrease", keeping without special order as the base. Select "none" if there is no effect.) Without Special Order With Special Order Impact Revenue Materials Labor Machine depreciation Contribution margin Rent Heat and light Other production costs Marketing and administration Operating profit (loss) RA1 Reg A2 > Required: 0-1. Calculate the differential operating profit (loss) 8-2. From an operating profit (loss) perspective for March, should Ms. Nil accept the order? b. What is the minimum price Ms. Nill should accept to take the special order? Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Reg B From an operating profit (loss) perspective for March, should Ms. Nill accept the order? Yes ONO ( Req A1 Reg B > Required: 0-1. Calculate the differential operating profit (loss). 0-2. From an operating profit (loss) perspective for March, should Ms. Nili accept the order? b. What is the minimum price Ms. Nili should accept to take the special order? Complete this question by entering your answers in the tabs below. Req A1 Reg A2 ReqB What is the minimum price Ms. Nili should accept to take the special order? Minimum price
