Maria's Food Service provides meals that nonprofit organizations
distribute to handicapped and elderly people. The following is her
forecasted income statement for April, when she expects to produce
and sell 3,800 meals:
Fixed costs included in this income statement are $6,004 for meal
production and $760 for administrative costs. Maria has received a
special request from an organization sponsoring a picnic to raise
funds for the Special Olympics. This organization is willing to pay
$3.90 per meal for 300 meals on April 10. Maria has sufficient idle
capacity to fill this special order. These meals will incur all of
the variable costs of meals produced, but variable administrative
costs and total fixed costs will not be affected.
Maria S Food Service Provides Meals That Nonprofit Organizations Distribute To Handicapped And Elderly People The Follo 1 (89.12 KiB) Viewed 45 times
2:08 k ces Required: a. What impact would accepting this special order have on operating profit? (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Status Quo 3,800 Units Alternative 4,100 Units Difference Sales revenue Variable costs: Meals Administrative higher lower Contribution margin Fixed costs none Operating profit b. From an operating profit perspective for April, should Maria accept the order? Yes O No
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