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7 Marks Western Optical ordinarily sells the X-lens for $150. The variable production cost is $72, the fixed production cost is $27 per unit, and
7 Marks Western Optical ordinarily sells the X-lens for $150. The variable production cost is $72, the fixed production cost is $27 per unit, and the variable selling cost is $3. A customer has requested a special order for 30,000 units, for $90 per unit, of the X-lens to be imprinted with the customer's logo. This special order would not involve any selling costs, but Western Optical would have to purchase an imprinting machine for $150,000. Western has a capacity to produce 150,000 units and ordinarily sells 120,000 units so there should be capacity for the order. The imprinting machine has no further use after this order. Required 1. Should the company accept or reject the special order from a financial perspective? Show your calculations. (5 marks), and 2. What are some of the non-financial issues with this special order that the company should take into consideration before it accepts or rejects the order (2 marks) Place your answer in the space below
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