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A Special-Order Decision Jenna Company, a medical supply company has been approached by a new customer with an offer to purchase 20,000 units of its

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A Special-Order Decision Jenna Company, a medical supply company has been approached by a new customer with an offer to purchase 20,000 units of its basic first aid kit at a price of $9 each. The new customer is a chain of hotels in a new region not currently served by Jenna Company. The customer wants to place a kit in each hotel room, and Jenna Company's logo would remain on each kit. Existing sales to current customers are not expected to be affected by the special sale. The company has been facing stiff competition in this market for the last two years. Its competition has been able to take away some of its sales. Jenna Company normally produces 100,000 first aid kits each year but only plans to produce and sell 75,000 in the coming year. The normal sales price of its commercial first aid kit is $14. Unit cost information for the normal level of activity is as follows: Required: 1. Name the alternatives available to Jenna Company. 2. List the relevant cost(s) of special purchase order. 3. From a financial perspective, should Jenna Company agree to the special purchase order? Why or why not? (Show your analysis.) 4. What considerations other than cost should Jenna Company contemplate? 5. Assume that Jenna Company has been exploring options to use the freed-up capacity to offer a new product into the market. The new product would require no additional fixed costs, and would have a contribution margin of $0,80. It takes all the extra capacity just to make 15,000 units of the new product. In this scenario should Jenna accept the special-order for its first-aid kits or should it pursue the new product opportunity? What is the financial difference between the two? What else should the company consider

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