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7. Silver Lake Cabinets is approached by Ms. Jenny Zhang, a new customer, to fulfill a large one-time-only special order for a product similar to
7. Silver Lake Cabinets is approached by Ms. Jenny Zhang, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. The following per unit data apply for sales to regular customers: Direct materials $100 Direct labor 125 Variable manufacturing support 60 Fixed manufacturing support 75 Total manufacturing costs 360 Markup (60%) 216 Targeted selling price $576 Silver Lake Cabinets has excess capacity. Ms. Zhang wants the cabinets in cherry rather than oak, so direct material costs will increase by $30 per unit. i. For Silver Lake Cabinets, what is the minimum acceptable price of this one-time-only special order? ii. Other than price, what other items should Silver Lake Cabinets consider before accepting this one-time-only special order? iii. How would the analysis differ if there was limited capacity
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