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The manufacturing capacity of Donaldson Rotator Company's plant faCility is 52000 rotators per quarter Requirements Operating VESUITS for the first QUEFTEI Dhi year 3'9 as
The manufacturing capacity of Donaldson Rotator Company's plant faCility is 52000 rotators per quarter Requirements Operating VESUITS for the first QUEFTEI Dhi year 3'9 as follows (a) Determine the Impact on operating income if Donaldson accepts this order. What other Sales (31.000 Units atS'lQ) SIS 589'000 considerations are relevant in this deCISIon'? _ 167 400 (b) Assumethat Donaldson decrdes to run an extra shift sothat it can acceptthe foreign Variable Manufacturing and Selling Costs ' order without forgoing sales to its regular domestic customers The proposed extra shift . n . Contribution Margin 421600 rivould increase capacity by ZlS and increase fixed costs by $29000, Determine the impact on operating Income If Donaldson operates the extra shift and accepts the Fixed (30515 97000 export order What other considerations are relevant in this deCision'? 35 324600 Operating income Aforeign distributor has offered to buy 26:000 units at 518 per unit during the second quarter ofthis year. Domestic demand is expected to remain the same as in the first quarter Requirement (a) Determine the impact on operating income if Donaldson accepts this order. What other considerations are relevant in this deCISIon? Begin by determining the operating income for Donaldson during the second quarter of this year Sales Variable manufacturing and selling costs Contribution margin Fixed costs Operating income
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