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The management team of Bramble Industries was evaluating its performance for the first half of the year. Production and sales of its fans were
The management team of Bramble Industries was evaluating its performance for the first half of the year. Production and sales of its fans were on budget at 3,100 units to date, with the following income statement reflecting its income for the first half of the year. Sales Variable costs: DM DL Variable-MOH Variable selling Contribution margin Fixed costs: Fixed-MOH Fixed selling Operating income (loss) $248,000 $43,400 27,900 9,300 9,300 89,900 158,100 34,000 107,000 141,000 $17,100 Orders for the second half of the year were coming in slower than what the company had been expecting. When a new customer called and requested a special discount, the sales team listened. (a) Your answer is partially correct. Assume the customer requests 210 units in the special order and offers $53 per unit. Since the customer came directly to the company, no variable selling cost will be incurred. How much better or worse off will Bramble Industries be if it accepts this special order, assuming it has enough idle capacity for the order? Bramble Industries would be better off by $ by accepting this order.
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