Quick Lift manufactures motorcycle power lift ramps for loading motorcycles into the bed of a pickup truck in Erin. Quick Lift's contribution margin income statement for the most recent month contains the following data:

Southern Ontario Riders' Group (SORG) wants to buy 50 lifts from Quick Lift. Acceptance of the order will not increase Quick Lift's variable marketing and administrative expenses or any of its fixed expenses. The Quick Lift plant has enough unused capacity to manufacture the additional lifts. SORG has offered $2,000 per lift, which is below the normal sale price of $3,100.
Required:
1. Prepare an incremental analysis to determine whether Quick Lift should accept this special sales order.
2. Identify long-term factors Quick Lift should consider in deciding whether to accept the special sales order.

Question

Quick Lift manufactures motorcycle power lift ramps for loading motorcycles into the bed of a pickup truck in Erin. Quick Lift's contribution margin income statement for the most recent month contains the following data:
 
 Southern Ontario Riders' Group (SORG) wants to buy 50 lifts from Quick Lift. Acceptance of the order will not increase Quick Lift's variable marketing and administrative expenses or any of its fixed expenses. The Quick Lift plant has enough unused capacity to manufacture the additional lifts. SORG has offered $2,000 per lift, which is below the normal sale price of $3,100.
Required:
1. Prepare an incremental analysis to determine whether Quick Lift should accept this special sales order.
2. Identify long-term factors Quick Lift should consider in deciding whether to accept the special sales order.

Quizplus · Accepted Answer

The Answer of Quick Lift manufactures motorcycle power lift ramps for loading motorcycles into the bed of a pickup truck in Erin. Quick Lift's contribution margin income statement for the most recent month contains the following data:
 
 Southern Ontario Riders' Group (SORG) wants to buy 50 lifts from Quick Lift. Acceptance of the order will not increase Quick Lift's variable marketing and administrative expenses or any of its fixed expenses. The Quick Lift plant has enough unused capacity to manufacture the additional lifts. SORG has offered $2,000 per lift, which is below the normal sale price of $3,100.
Required:
1. Prepare an incremental analysis to determine whether Quick Lift should accept this special sales order.
2. Identify long-term factors Quick Lift should consider in deciding whether to accept the special sales order.

Quick Lift Manufactures Motorcycle Power Lift Ramps for Loading Motorcycles