Cost Accounting-Brightstone Tire and Rubber Company has capacity to produce 177,500

Brightstone
Tire and Rubber Company has capacity to produce 177,500 tires. Brightstone
presently produces and sells 130,500 tires for the North American market at a
price of $178 per tire. Brightstone is evaluating a special order from a
European automobile company, Euro Motors. Euro is offering to buy 19,600 tires
for $116.62 per tire. Brightstone’s accounting system indicates that the total
cost per tire is as follows:

Direct materials

$54

Direct labor

24

Factory overhead (62% variable)

24

Selling and administrative expenses
(44% variable)

25

Total

$127.00

Brightstone
pays a selling commission equal to 4% of the selling price on North American
orders, which is included in the variable portion of the selling and
administrative expenses. However, this special order would not have a sales
commission. If the order was accepted, the tires would be shipped overseas for
an additional shipping cost of $7.65 per tire. In addition, Euro has made the
order conditional on receiving European safety certification. Brightstone
estimates that this certification would cost $165,424.

Required:

A.

Prepare
adifferential analysis dated January
21 on whether to reject (Alternative 1) or accept (Alternative 2) the special
order from Euro Motors. Refer to the lists of Labels and Amount Descriptions
for the exact wording of the answer choices for text entries. For those boxes
in which you must enter subtracted or negative numbers use a minus sign. If
there is no amount or an amount is zero, enter “0”. A colon (:)
will automatically appear if required.

B.

Determine
whether the company should reject (Alternative 1) or accept (Alternative 2)
the special order from Euro Motors

C.

What
is the minimum price per unit that would be financially acceptable to
Brightstone?

If you could please keep it in this
format and show me how you got each number Thank You:
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