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Accept or Reject: Weller Company makes a product, K9. It has a production capacity of 10,000 units. The regular selling price is $80 each. Wheller
Accept or Reject: Weller Company makes a product, K9. It has a production capacity of 10,000 units. The regular selling price is $80 each. Wheller has received a request from Tom for a special order of 1,000 units of K9. Tom has suggested a price is $60 per unit. No variable selling cost would be incurred for this order. The following is the per-unit cost information: Variable manufacturing Fixed manufacturing Unit manufacturing cost $35 $20* $55 Variable selling Fixed selling Unit selling cost $6 $4 $10 Total cost $65 based on production and sales of 10,000 units Assume that Weller is currently making and selling 9,000 units to the regular market. A. If Weller accepts the special order, what would be the effect on the company's overall profit? Indicate the direction increase or decrease) and amount. B. In order not to lose money, what should be the minimum price that Weller has to charge to Tom? (3) Use the same information given in (2). Assume that Weller is currently making and selling 10,000 units to the regular market. A. If Weller accepts the special order, what would be the effect on the company's overall profit? Indicate the direction (increase or decrease) and amount. B. In order not to lose money, what should be the minimum price that Weller has to charge to Tom
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