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A new customer wants to purchase 200 units from Earth Treasures Inc. at a special price of $50 each. The normal selling price is $80
A new customer wants to purchase 200 units from Earth Treasures Inc. at a special price of $50 each. The normal selling price is $80 per unit. Earth Treasures Inc. currently produces 10,000 units per year and has capacity to produce 14,000 units. Other data relating to this product is provided below Per Unit $20 18 Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead 5 4 Earth Treasures would need to purchase a special tool costing $1,600 in order to fill this order This tool would have no other use once the order was completed. Required: By how much will total profit increase or decrease if this order is accepted? (6 marks)
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