Question
1. Lando Tents produces 240,000 name tents per month, while operating at 75% capacity. Variable manufacturing costs are $0.052 per unit. Fixed costs are $10,920
1. Lando Tents produces 240,000 name tents per month, while operating at 75% capacity. Variable manufacturing costs are $0.052 per unit. Fixed costs are $10,920 or $.0455 per unit. The name tents are normally sold directly to retailers for $0.20 each. Lando Tents has an offer from Dusch Tents (a wholesaler) to purchase an additional 10,000 name tents at $0.15 per unit. Acceptance of the offer would not affect normal sales of the product, and the additional units can be manufactured without increasing plant capacity or fixed costs; however, Lando Tents would incur special shipping costs of $100 on the units. Indicate the net income (loss) Lando Tents would realize by accepting the offer (4pts).
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