Cabletronix is a contract manufacturer of electronic components, including Cisco equipment cables. Cabletronix has a number of network installers who are regular customers for the company's cables. To grow its business. Cabletronix has joined a business-to-business trading community. Sales manager Jenny Wang informs CEO Elizabeth Pronai of a potentially promising order for 1.000 Cisco-equivalent cables on the trading community's Web site. This is a large order, and Pronai recognizes that meeting the job's three-week deadline will require a coordi- nated elfort by the cable division and may disrupt completion of some existing orders. Still. Pronai believes the company must move in this direction to be successful. Pronai checks with Cabletronix purchasing manager Steve Hunt, who tells her that the company has the necessary supply of wire in stock, but the connectors must be rush-ordered. Production manager Tony Alvarez suggests that he could manage the production schedule by hiring a temporary worker and using overtime. Finally. Pronai asks Wang for a sale price that would give Cabletronix a good chance of landing the order. Based on the information these managers provided. Pronai sends the following e-mail: Subject: Special Web Cable Order Date: From: To: May 15, 2005 Elizabeth Tony Steve Jenny Thanks for your quick response to my request for information on the feasibility of meeting the special order. I have summarized our expected "actual" quantities and costs. Please consider this information and let me know whether you think we should proceed with the bid. I need a response this afternoon. We may need to meet first thing in the morning to make a final deci- sion. Direct materials: Wire 13.200 feet @ $5 a foot). Connectors (2.400 @ $8.50 each). Direct labor (350 hours @ $26 per hour). Variable manufacturing overhead (350 hours @ $24 per hour) ($24 per hour is the standard variable overhead rate). Fixed manufacturing overhead Sale price. $16,000 $20.400 $9.100 $8.400 No change $60 per cable Required Each member of your team should play the role of one of the four members of Cabletronix's management. Team members must exchange e-mails and decide when they will meet as a group, leaving enough time for each team member to perform his or her own analysis and provide the result to CEO Elizabeth Pronai before the meeting. Jenny Wang: Unit sales volume and the sales revenue flexible budget variance are primary determinants of your own performance evaluation as sales manager. The standard sale price is $65 a cable. Before meeting with the entire team, determine whether bidding on the order is (1) in the company's interest and (2) in your own interest. As a starting point. prepare a contribution margin income statement for the order. + Send an e-mail presenting your recommendation (and the analysis on which the recom mendation is based) to CEO Elizabeth Pronai before the team meeting. Steve Hunt: Before meeting with the entire team, determine whether bidding on the order is (1) in the company's interest and (2) in your own interest. As a starting point, prepare a contribution margin income statement for the order. The direct materials price variances are primary determinants of your own performance evaluation as purchasing manager. Standard prices for the materials are: wire $5 a foot, con- nectors $7 each. Send an e-mail presenting your recommendation (and the analysis on which the recommendation is based) to CEO Elizabeth Pronai before the team meeting. Tony Alvarez: Before meeting with the entire team, determine whether bidding on the order is (1 in the company's interest and (2) in your own interest. As a starting point, prepare a contribution margin income statement for the order. The direct materials elficiency variances and the direct labor variances are important determinants of your own performance evaluation as production manager. Standard quanti- te for the materials are 3 leet of wire and 2 connectors per cable. The direct labor standards are 0.3 hours a cable at $21 an hour. Send an e-mail presenting your recommendation (and the analysis on which the recommendation is based) to CEO Elizabeth Pronai before the team meeting. Elizabeth Pronai: Before meeting with the entire team. determine whether bidding on the order is in the company's interest. As a starting point, prepare a contribution margin income statement for the order. Based on the e-mail received from your managers, lead the team meeting to (1) reach a consensus on whether accepting the order is in the best interests of the company. (2) recog- nize any concerns the managers may have, and (3) lead the team discussion in how Cabletronix can address their concerns. After the team meeting, prepare an e-mail for distri- bution to managers that summarizes the team's final decision and supporting discussion.