Question

- D x x + Cearch Google or type a URL Homework 0 Sved Help Save & Exit Submit Check my work Exercise 4-36 (Static) Special Orders (LO 4-1,2) Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is her forecasted income statement for April, when she expects to produce and sell 3,000 meals. Per Unit 6. Sales revenue Costs of meals produced Gross profit Administrative costs Operating profil Anunt $ 18.830 13.500 $ 4.500 2,100 $ 2,400 $1.50 0.70 5 .88 Fixed costs included in this income statement are $4,500 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. Marla has sufficient Idle capacity to fill this special order. These meals will incur all of the variable costs of meals produced, but variable administrative costs and total fixed costs will not be affected. Required: a. What Impact would accepting this special order have on operating profit? (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Status Quo 3,000 Units Alternative 3,300 Units Difference Sales revenue Variable costs Meals Administrative < Prey 1 of 6 Next > # Type here to search A 133 AM 1/18/2020 – u

Answer 1

Solution:

	Status Quo	Alternative	Difference
	3000 Units	3300 units
Sales revenue	18,000.00	19,050.00	1,050.00	Higher
Variable cost:
Meals	9,000.00	9,900.00	900.00	Higher
Administrative	1,500.00	1,500.00	-	None
Contribution Margin	7,500.00	7,650.00	150.00	Higher
Fixed Costs	5,100.00	5,100.00	-	None
Operating profit	2,400.00	2,550.00	150.00	Higher

Sales reveue	=3000*6+300*3.5
	=19050

Conclusion:

There will be 150$ profit if she accepts the offer

Thank You,

I hope you got the desired solution.