The management team of Tamarisk Industries was evaluating its performance for the first half of the...
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The management team of Tamarisk Industries was evaluating its performance for the first half of the year. Production and sales of its fans were on budget at 3,200 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) $48,000 28,800 9,600 9,600 34,000 111,000 $288,000 96,000 192,000 145,000 $47,000 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. Assume instead that the customer requests 105 units in the special order and offers $42 per unit. Tamarisk management still believes there will be enough capacity to take on the special order. This time, however, variable selling costs will be incurred because the customer is working through a sales representative. How much better or worse off will Tamarisk Industries be if it accepts this special order? Tamarisk Industries would be better off by $ 440 by accepting this order. The management team of Tamarisk Industries was evaluating its performance for the first half of the year. Production and sales of its fans were on budget at 3,200 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) $48,000 28,800 9,600 9,600 34,000 111,000 $288,000 96,000 192,000 145,000 $47,000 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. Assume instead that the customer requests 105 units in the special order and offers $42 per unit. Tamarisk management still believes there will be enough capacity to take on the special order. This time, however, variable selling costs will be incurred because the customer is working through a sales representative. How much better or worse off will Tamarisk Industries be if it accepts this special order? Tamarisk Industries would be better off by $ 440 by accepting this order.
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