Toastem manufactures small appliances. The costs of manufacturing these appliances are listed below. Toastem has received a special order for 2,400 toasters from an appliance retailer whose usual supplier cannot supply the toasters because of a labor strike. Toastem would not incur any variable marketing costs on the special order. The retailer has offered Toastem $10 per toaster.

Toastem normally charges $13 per toaster. The following costs are based on a production level of 30,000 toasters per year.

If Toastem has the capacity to produce 35,000 toasters per year, should they accept the special order?
If Toastem has the capacity to produce 30,000 toasters per year, should they accept the special order?

Information about your firm:
Selling price per unit: $400 Variable cost per unit: $250 Annual fixed costs: $6,000,000 Units the business will sell next year: 50,000 Unit contribution margin:
Contribution margin ratio:
Before-tax profit at expected unit sales level:
Unit sales if the business wants to earn $1,800,000 in before-tax profit:
Revenue if the business wants to earn $1,800,000 in before-tax profit:
Breakeven point in units:
Breakeven point in revenues:

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Manufacturing costs: Direct labor Direct materials Variable overhead Total Fixed overhead Marketing costs: Variable marketing Fixed marketing Total Total product costs Per unit Total $ 90,000 105,000 75,000 $ 3.00 3.50 2.50 1.50 45,000 $10.50 $315,000 $ 1.00 0.75 $ 1.75 $12.25 $ 30,000 22,500 $ 52,500 $367,500