Question

Check my work Materials Labor Variable overhead Fixed overhead ($20,130 per month, 18,300 units per month) Total coats per sandwich $1.00 0.40 0.40 1.10 $2.90 One of MTA's regular customers asked the company to fill a special order of sandwiches at a selling price of $2.20 each for a fund- raising event sponsored by a social club at the local college, MTA has capacity to fill it without affecting total fixed costs for the month. MTA's general manager was concerned about selling the sandwiches below the cost of $2.90 and has asked for your advice. Required: a. Prepare a schedule to show the impact on MTA's profits of providing 900 sandwiches in addition to the regular production and sales of 18,300 sandwiches per month b. Based solely on the data given, what is the lowest price per sandwich at which the special order can be filled without reducing MTA's profits? Complete this question by entering your answers in the tabs below. Required A Required B Based solely on the data given, what is the lowest price per sandwich at which the special order can be filled without reducing MTA's profits? (Enter your answer to 2 decimal places.)

Answer 1

B2 X fa 1 AB DE F $ 1,980 $ 900 sales revenue from special order less: relevant costs materials labor variable overhead total relevant costs net increase in profits due to accepting special order $360 $360 $ 1,620 $360 the lowest price per sandwich at which the special order can be filled without reducing MTA's profits shall be the relevant cost per unit of producing a sandwich for the special order. lowest price per sandwich = $1.00 + $0.40 + $0.40 lowest price per sandwich= $ 1.80 per sandwich

for formulas and calculations, refer to the image below -

X fic i ДА В =900*2.2 1 Isales revenue from special order less: relevant costs materials labor variable overhead total relevant costs net increase in profits due to accepting special order =900*1 =900*0.4 =900*0.4 =SUM(D4:06) =E2-E7 the lowest price per sandwich at which the special order can be filled without reducing MTA's profits shall be the relevant cost per unit of producing a sandwich for the special order. lowest price per sandwich = $1.00 + $0.40 + $0.40 lowest price per sandwich= =1+0.4+0.4 per sandwich

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