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Suppose McGregor's wants to buy 5,300 vests from Deep Blue. Acceptance of the order will not increase Deep Blue's variable marketing and administrative expenses or
Suppose McGregor's wants to buy 5,300 vests from Deep Blue. Acceptance of the order will not increase Deep Blue's variable marketing and administrative expenses or any of its fixed expenses. The Deep Blue plant has enough unused capacity to manufacture the additional vests. McGregor's has offered $14 per vest, which is below the normal sale price of $17 Requirements 1. Prepare an incremental analysis to determine whether Deep Blue should accept this special sales order 2. Identify long-term factors Deep Blue should consider in deciding whether to accept the special sales orde In Focus bW Sales in units 38,500 lini Sales revenue $ 654,500 Variable expenses: Manufacturing $ 100,100 112,000 Marketing and administrative 212,100 Total variable expenses 442,400 Contribution margin Fixed expenses: Manufacturing 206,000 102,000 Marketing and administrative 308,000 Total fixed expenses $ 134,400 Operating income (loss). Print Done Requirements 1. Prepare an incremental analysis to determine whether Deep Blue should accept this special sales order 2. Identify long-term factors Deep Blue should consider in deciding whether to accept the special sales order. Requirement 1. Prepare an incremental analysis to determine whether Deep Blue should accept this special sales order Complete the incremental analysis in the table below. (Use parentheses or a minus sign to enter a decrease in operating Deep Blue Incremental Analysis of Special Sales Order Expected increase in revenue Expected increase in expenses Expected increase (decrease) in operating income Enter any number in the edit fields and then click Check Answer. Clear All
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