The Global Trucking Company has the following operating results to date for 20X1: (Click the icon to view the operating results.) A large Boston manufacturer has inquired about whether Global would be interested in trucking a large order of its parts to Chicago. Jeff Silverman, operations manager, investigated the situation and estimated that the "fully allocated" costs of servicing the order would be $75,000. Using his general pricing formula, he quoted a price of $79,000. The manufacturer replied, "We'll give you $64,000, take it or leave it. If you do not want our business, we'll truck it ourselves or go elsewhere." A cost analyst had recently been conducting studies of how Global's operating costs tended to behave. (Click the icon to view the cost analyst's results.) Read the requirements Requirement 1. Using a contribution-margin technique, prepare an analysis for Global. Begin by calculating the change in operating income under the fully-allocated cost approach if the order is accepted. (Use parentheses or a minus sign for a negative change in operating income.) Fully-allocated - X cost approach More info Requirements $ Apparent change in operating income Operating revenues Operating costs 60,000,000 40,000,000 1. Using a contribution-margin technique, prepare an analysis for Global. 2. Should Global accept the order? Explain. $ 20,000,000 Operating income Print Done Print Done The Global Trucking Company has the following operating results to date for 20X1: (Click the icon to view the operating results.) A large Boston manufacturer has inquired about whether Global would be interested in trucking a large order of its parts to Chicago. Jeff Silverman, operations manager, investigated the situation and estimated that the "fully allocated" costs of servicing the order would be $75,000. Using his general pricing formula, he quoted a price of $79,000. The manufacturer replied, "We'll give you $64,000, take it or leave it. If you do not want our business, we'll truck it ourselves or go elsewhere." A cost analyst had recently been conducting studies of how Global's operating costs tended to behave. (Click the icon to view the cost analyst's results.) Read the requirements Requirement 1. Using a contribution-margin technique, prepare an analysis for Global. Begin by calculating the change in operating income under the fully-allocated cost approach if the order is accepted. (Use parentheses or a minus sign for a negative change in operating income.) Fully-allocated - X cost approach More info Requirements $ Apparent change in operating income Operating revenues Operating costs 60,000,000 40,000,000 1. Using a contribution-margin technique, prepare an analysis for Global. 2. Should Global accept the order? Explain. $ 20,000,000 Operating income Print Done Print Done
