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1. Aurora currently sells 25,000 gadgets per month. A large retail chain has offered to purchase 5,000 gadgets but at price that is 16% below
1. Aurora currently sells 25,000 gadgets per month. A large retail chain has offered to purchase 5,000 gadgets but at price that is 16% below the regular price. There would be no sales commission paid on this special order, which will reduce the variable selling expense by 75%. Aurora would need to lease a special machine to engrave the retail chain's name on to the gadget. The cost of this machine is $10,000 per month. There is no guarantee that any further sales orders will be received from this company. Determine the incremental income that this order would generate. Should Aurora accept the order
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