Homework Answers
| Q.1 | If working at 80% capacity | |||
| Reevnue from special order | 22000 | |||
| Less: Cost associated with special order | ||||
| Variable Cost | 16000 | |||
| Financial advantage | 6000 | |||
| Decision: Accept special order | ||||
| Q.2 | If working at 100% capacity | |||
| Reevnue from special order | 22000 | |||
| Less: Cost associated with special order | ||||
| Variable Cost | 16000 | |||
| Loss of contribution margin | 24000 | (2000* (20-8)) | ||
| Financial Disadvantage | -8000 | |||
| Decision: Reject special order | ||||
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