Question: Normal No Spacing Heading 1 Styles Dictate Sensitivity Editor Pane Maria's Food Service Name: Maria's Food Service provides meals that nonprofit organizations distribute to
Normal No Spacing Heading 1 Styles Dictate Sensitivity Editor Pane Maria's Food Service Name: Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. Here is her forecasted income statement for April, when she expects to produce and sell 3,000 meals: Amount Per Unit Sales revenue $18,000 $6.00 Costs of meals produced 13,500 4.50 Gross profit... $ 4,500 $1.50 Administrative costs 2,100 0.70 Operating profit.. $ 2,400 $0.80 Committed fixed costs included in this income statement are $4,000 for meal production and $600 for administrative costs. Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $3.50 per meal for 300 meals on April 10. Maria does not currently have sufficient idle capacity to fill this special order. She would need to reduce her normal operations by 100 meals on that day in order to fulfill the special request. Required a. Recast the absorption-based income statement above into a contribution-based income statement. b. Determine the financial impact of accepting the picnic request. Be sure to document your analysis What are some nonfinancial factors that Maria may take into consideration for her decision?
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
