Ferrish Industries has an annual plant capacity of 77,000 units; current production is 58,000 units...
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Ferrish Industries has an annual plant capacity of units; current production is units per year. At the current production volume, the variable cost per unit is $ and the fixed cost per unit is $ The normal selling price of Ferrish's product is $ per unit. Ferrish has been asked by Caldwell Company to fill a special order for units of the product at a special sales price of $ per unit. Caldwell is located in a foreign country where Ferrish 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 Ferrish's regular sales.
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Requirement How would accepting the special order impact Ferrish's operating income? Should Ferrish accept the special order?
Complete the following incremental analysis to determine the impact on Ferrish's operating income if it accepts this special order. Enter a for any zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin andor operating income from the special order.
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