Variations Company Had the Following Results of Operations for the Past

question 69

Essay

Variations Company had the following results of operations for the past year:
$$\begin{array} { | l | r | } \hline \text { Sales } ( 8,000 \text { units at } \$ 7.00 ) & \$ 56,000 \\\hline \text { Variable manufacturing cost: } & ( 30,000 ) \\\hline \text { Fixed manufacturing costs } & ( 6,000 ) \\\hline \text { Fixed selling and administrative expenses } & \underline{( 4,500 )} \\\hline \text { Operating income } &\underline{ \$ 15,500} \\\hline\end{array}$$ A foreign company (whose sales will not affect Variations' regular sales) offers to buy 700 units at $4.00 per unit. In addition to variable manufacturing costs, there would be an export cost of $0.30 per unit. Prepare an analysis of this additional business to show whether Variations should take this order.

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Definitions:

Ethical Issues

Matters or situations that involve debates over right and wrong, often requiring a decision on moral grounds.

Technology

The application of scientific knowledge for practical purposes, especially in industry.

Expanded

Refers to an increase in size, scope, or scale of an operation or activity.

Sandwich Generation

A generation of people who are caring for their aging parents while supporting their own children.