Incremental Analysis
Not what you're looking for?
See attached file for full problem description.
A Company produced and sold 8,000 units of product and is operating at 80% of plant capacity.
Unit information about its product is as follows:
Sales Price $35
Variable manufacturing cost $16
Fixed manufacturing cost (48,000 / 8,000) 6 22
Profit per unit $13.00
The company received a proposal from a foreign company to buy 1,000 units of the company's
product for $20 per unit, This is a one-time only order and acceptance of this proposal will not affect
the company's regular sales. The President the company is reluctant to accept the proposal
because he is concerned that the company will lose money on the special order. All fixed costs are
allocated to individual products.
Instructions
Prepare a schedule reflecting an incremental analysis of this proposal. Indicate the effect the
acceptance of this order might have on the company's income.
Purchase this Solution
Solution Summary
The solution explains how to prepare an incremental analysis for a special order
Solution Preview
Please see the attached file
A Company produced and sold 8,000 units of product and is operating at 80% of plant capacity.
Unit information about its product is as follows:
Sales Price $35
Variable manufacturing cost $16
Fixed manufacturing cost (48,000 / 8,000) 6 22
Profit per unit $13.00
The company received a proposal from a foreign company to buy 1,000 ...
Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.