Felter Company produced and sold 50,000 units of product and is operating at 70% of plant capacity. Unit information about its product is as follows:

The company received a proposal from a foreign company to buy 15,000 units of Felter Company's product for $50 per unit. This is a one-time only order and acceptance of this proposal will not affect the company's regular sales. The president of Felter Company is reluctant to accept the proposal because he is concerned that the company will lose money on the special order.

Instructions

(a) Prepare a schedule reflecting an incremental analysis of this special order.

(b) Should Felter accept/reject this order and why?

Transcribed Image Text:

Sales Price Variable manufacturing cost Fixed manufacturing cost (S500,000 Profit per unit $70 S45 50,000) 10 S15