8. Marsdon Company has an annual production capacity of 15.000 units. The costs associated with production and sale of the company's product are given below:. Manufacturing costs: Variable Fixed (annual cost) Selling and administrative costs: Variable (sales commissions) Fixed (annual cost) $12 per unit $90,000 $3 per unit $60,000 The company presently is selling 12,000 units annually at a selling price of $28 each. A special order has been received from a distributor who wants to purchase 3,000 units at a special price of $20 each. Regular sales would not be affected by this order and the order could be filled without any impact on total fixed costs. Sales commissions on the special order would be reduced by one-third. Required: Determine whether the company should accept the special order. 19. Janeiro Skate, Inc. currently manufactures the wheels that it uses for its in-line skates. The annual costs to manufacture the 150,000 wheels needed each year are as follows: Total Cost $165,000 45,000 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total 60,000 300,000 $570,000 Kasba Rubber Company has offered to provide Janeiro with all of its annual wheel needs for $3.50 per wheel. If Janeiro accepts this offer, 75% of the fixed manufacturing overhead above could be totally eliminated. Also, Janeiro would be able to rent out the freed up space and could generate $72,000 of income annually. Assume that direct labor is a variable cost. Required: Based on this information, would Janeiro be financially better off to continue making the wheels or to buy them from Kasba? he follo 9 |Page