#2)

If Loft Lake cabinets currently sells 2,000 units for regular customers. For Loft Lake Cabinets, what is the minimum acceptable selling price for this one time only special order?

Problem 3 Loft Lake Cabinets is approached by Ms. Jenny Zhang, a new customer, to fulfill a large one-time-only special order of 200 units at $190 each for a product similar to one offered to regular customers. Loft Lake's production capacity is 2,000 units. The following per unit data apply for sales to regular customers: Direct materials Direct labor Variable manufacturing OH Fixed manufacturing OH Variable marketing cost S50.00 65 25.00 30 10.00 15 195.00 per unit Total costs Selling price $280.00 per unit Ms. Zhang wants the cabinets in cherry rather than oak, so direct material costs will increase by $15 per unit. Special order will not incur variable marketing cost. Required: 1. If Loft Lake Cabinets currently sells 1,800 units to regular customers, how much is Loft Lake's change in operating income if the special order is accepted? (6 points) Ploduce t sale 2000 cns