Question
30. Rayburn's Tents makes backpacking tents. It has the capacity to produce 10,000 tents per year and currently is producing and selling 7,000 tents. Normal
30. Rayburn's Tents makes backpacking tents. It has the capacity to produce 10,000 tents per year and currently is producing and selling 7,000 tents. Normal selling price for a tent is $470. Variable costs are $100 for direct materials, $200 for direct labor, and $25 for other manufacturing costs. Fixed costs of $80 are allocated to each tent. Rayburn's has received a special order for 1,500 tents at $340 each.
a. Should Rayburn's accept the special order? Why? Write a short sentence. b. Support your answer with appropriate computations that show how the order will affect Rayburn's income.
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