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Answer :
Answer:
$5
Explanation:
Differential revenue:
Revenue per pair of boots $275
Differential costs:
Variable manufacturing costs $(250)
Additional decoration (20) (270)
Differential profit from accepting special order($275-$270) $5
Therefore the differential income or loss per pair of boots from selling to the organization will be $5 which means Diamond Boot Factory should accept the special order.
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Answer:
incremental income of $ 500 will result from the special offer.
Explanation:
Consider the incremental costs and revenues resulting from accepting the special offer.
Sales (100×$275) 27,500
Variable cost (100×$250) (25,000)
Special Stitching (100×$20) (2,000)
Net Income/Loss 500
Therefore an incremental income of $ 500 will result from the special offer.
