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A company currently sells 8,220 basketballs (units) per year for $25 each. The company can make up to 10,220 basketballs per year. Each basketball
A company currently sells 8,220 basketballs (units) per year for $25 each. The company can make up to 10,220 basketballs per year. Each basketball made includes $15 in variable costs and $6.50 of fixed costs. A new customer offers to buy 655 basketballs for $20 each. For this special offer, the incremental fixed costs are $3.80 per ball. No other costs will change if the offer is accepted. a) For this special offer, calculate the income. b) Should the special offer be accepted or rejected? (a) Special offer analysis Per Unit Total Contribution margin Income (b) The company should
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