This Question: 9 pts 4 of 6 (5 complete) This Test: 50 pts possibl Barry Industr

Question

This Question: 9 pts 4 of 6 (5 complete) This Test: 50 pts possibl Barry Industries has an annual plant capacity of 67,000 units, current production is 57,000 units per year. At the current production volume, the variable cost per unit is $32.00 and the fixed cost per unit is $4.30. The normal selling price of Barry's product is $41.00 per unit. Barry has been asked by Caldwell Company to fill a special order for 8,000 units of the product at a special sales price of $29.00 per unit. Caldwell is located in a foreign country where Barry does not currently operate. Caldwell will market the units in its country under its own brand name, so the special order is not expected to have any effect on Barry's regular sales Read the requirements Requirement 1. How would accepting the special order impact Barry's onyating income? Should Barry accept the special order? Complete the following incremental analysis to determine the impact on Barry's operating income if it accepts this special order (Enter a "0' for any zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin and/or operating income from the special order) Total Order Incremental Analysis of Special Sales Order Decision Revenue from special order Choose from any list or enter any number in the input fields and then continue to the next question

Explanation / Answer

Requirment 1

Barry should not special order because it will decrease? operating income

Requirment 2

Barry should special order because it will Increase operating income

(8000 Units) Revenue Form Special order 232000 Less Expense associated with Special order variable Manufacturing overhead 256000 Contrbution Margin -24000 Less Additional Fixed Expense associated with the order 0 Increase(decrease) in operating income from the special order -24000

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