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vino Reven $9,000 $1.000 Contribution margin $1.400 Pro $5.000 Special order: Achen wants to buy 20 units of a discounted price of $30 per unit.
vino Reven $9,000 $1.000 Contribution margin $1.400 Pro $5.000 Special order: Achen wants to buy 20 units of a discounted price of $30 per unit. This is one time deale hart term decision. You have whare capacity to the order wet cutting your restora a) the the gross approach to decide whether you should take the special order status no special total amounts after adding wder) the special order $9,000 Variable costs $1,000 Contribution margin $7,200 $1,400 Profit 35.000 Should you take the special order? Why? YES -- the profit is positive with the special order ONO -- the low price for the special order reduces the contribution margin YES -- the profit is higher with the special order b) Use the incremental approach to decide whether you should take the special order. how much each amount changes or adding the specalande Incremental revenue Incremental variable costs incremental contribution margin Incrementale costs incremental prot Should you take the special order? Why? YES the incremental propositive YES -- the total profit is positive ONO -- the incremental profit is lower than the original profit
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