Cisco Pty Ltd manufactures handheld beaters For the first

eight #4524
Cisco Pty Ltd manufactures handheld beaters. For the first eight months of 2012, the company
reported the following operating results while operating at 80 per cent capacity.Sales (400 000
units) .......................................... $4 000 000Cost of sales .................................................... 2
400 000Gross profit ..................................................... 1 600 000Operating expenses
............................................ 900 000Profit ............................................................ $ 700 000Cost
of sales was 65 per cent variable and 35 per cent fixed. Operating expenses were 60 percent
variable and 40 per cent fixed. In October, Cisco Pty Ltd receives a special order for 20 000
beaters at $6 each from Angel Cakes located in New Zealand. Acceptance of the order would
result in $5000 of shipping costs but no increase in fixed operating costs.Required:a. Calculate
the contribution margin per beater for normal sales.b. Calculate the contribution margin per
beater for the special order.c. What is the minimum selling price for the special order?d. Should
Cisco Pty Ltd accept the special order? Explain your answer and show any calculations.View
Solution:
Cisco Pty Ltd manufactures handheld beaters For the first eight

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