Please help me pleas I will mark brilliant pleasee 4) The ABC Company manufactures table lamps in Toronto, Ontario. The ABC
Company produced and sold 7,000 units of their table lamps and is currently
operating at 70% of plant capacity. The per unit information for the table lamp is as
follows:
Sales Price of Table Lamp
Variable manufacturing cost
$25
Fixed manufacturing cost ($35,000 + 7,000) 5
Profit per unit
$10
The ABC Company has received a proposal from a foreign company to buy 500 table
lamps for $28 per table lamp/unit. This is a one-time only order and acceptance of
this proposal will not affect the company's other regular sales. The president of the
company is unsure to accept the one time proposal because she is concerned that
the company will lose money on the special order. Note, the fixed costs would not
increase if this one time order is accepted.
Instructions
Prepare a schedule reflecting an incremental analysis of the one time offer is
accepted. Show what the impact would be to the company's income if this one time
order is accepted.