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9 Monave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a company called Lost Mine Industries about producing a
9 Monave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a company called Lost Mine Industries about producing a special order for a custom umbrella called the Ultimate Shade (US). The special order umbrellas with the Lost Mine Company logo would be distributed to participants at an upcoming convention sponsored by Lost Mino. Lost Mine has offered to buy 3,400 of the US umbrelas at a price of 535 each. Mohave currenty has the excess capacity nacessary to accept the offor The following information is related to the production of the US umbrella 10 Do Direct ateriat Direct labor Variable manufacturing over Fixed manufacturing overhead Total cost Regular sales price 8.40 10.50 250 135.00 0 Required 1 Compute the incremental profit (or loss from accepting the special order 2. Should Mehave accept the special order? 3. Suppose that the special eder had been to purchase 3.900 umbrellas for $3200 och Recompute the incremento pronto los from accepting the special order under this scenario, 4. Assume that Molave is operating at full capacity Calculate the special order priceperunt at which Mohave would be indiferent between accepting or rejecting the special order
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