Nardin Outfitters has a capacity to produce 12,000 of their special arctic tents per year. The...

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Nardin Outfitters has a capacity to produce 12,000 of their special arctic tents per year. The company is currently producing and selling 5,000 tents per year at a selling price of $900 per tent. The cost of producing and selling one tent follows: Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs Total costs $ 440 90 80 50 $ 660 The company has received a special order for 500 tents at a price of $600 per tent from Chipman Outdoor Center. It will not have to pay any sales commission on the special order, so the variable selling and administrative costs would be only $45 per tent. The special order would have no effect on total fixed costs. The company has rejected the offer based on the following computations: Selling price per case Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs Net profit (loss) per case Required: $ 600 440 90 45 50 $ (25) a. What is the impact on profit for the year if Nardin Outfitters accepts the special order? b. Do you agree with the decision to reject the special order? Required A Required B What is the impact on profit for the year if Nardin Outfitters accepts the special order? (Enter your answers in thousands rounded to 1 decimal place. (i.e., 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Sales revenue (All revenues and costs in $000) Status Quo 5,000 Units Alternative 5,500 Units Difference higher Nardin Outfitters has a capacity to produce 12,000 of their special arctic tents per year. The company is currently producing and selling 5,000 tents per year at a selling price of $900 per tent. The cost of producing and selling one tent follows: Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs Total costs $ 440 90 80 50 $ 660 The company has received a special order for 500 tents at a price of $600 per tent from Chipman Outdoor Center. It will not have to pay any sales commission on the special order, so the variable selling and administrative costs would be only $45 per tent. The special order would have no effect on total fixed costs. The company has rejected the offer based on the following computations: Selling price per case Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs Net profit (loss) per case Required: $ 600 440 90 45 50 $ (25) a. What is the impact on profit for the year if Nardin Outfitters accepts the special order? b. Do you agree with the decision to reject the special order? Required A Required B What is the impact on profit for the year if Nardin Outfitters accepts the special order? (Enter your answers in thousands rounded to 1 decimal place. (i.e., 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Sales revenue (All revenues and costs in $000) Status Quo 5,000 Units Alternative 5,500 Units Difference higher

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To analyze the impact of accepting the special order on Nardin Outfitters profit we need to calculat... View the full answer