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Author Question: Impala Industries manufactures a component used by car manufacturers. Impala can produce 1,000,000 ... (Read 10 times)

curls713

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on: Feb 5, 2023

Question 1

Which of the following is not relevant in the decision to accept a special order?
◦ Sales commissions based on a percentage of the sales price
◦ Variable cost of the product
◦ Depreciation on factory equipment
◦ Direct labor associated with the product

Question 2

Impala Industries manufactures a component used by car manufacturers. Impala can produce 1,000,000 components per year. A foreign car manufacturer has approached Impala with an offer to purchase 120,000 components at price of $6 per unit. Impala's results for last year are as follows:

Sales (900,000 at $8)$7,200,00
Variable costs2,700,000
Contribution margin4,500,000
Fixed costs2,350,000
Operating income$2,150,000

If Impala accepts the offer, it will only be able to sell 880,000 units at the regular price due to its capacity constraints. What will Impala's total operating income be next year if it accepts the offer?
◦ $2,710,000
◦ $2,650,000
◦ $4,760,000
◦ $2,410,000
Managerial Accounting ¦ Davis ¦ 4th Edition
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Marked as best answer by curls713 on Feb 5, 2023

MajorWaffle

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Reply #1 on: Feb 5, 2023
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curls713

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Reply 2 on: Feb 5, 2023
:D TYSM

softEldritch

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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