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Aleen Company is presently operating at 40000 of capacity and manufacturing 24000 units of a patented electronic component. A special offer has been received from:
Aleen Company is presently operating at 40000 of capacity and manufacturing 24000 units of a patented electronic component. A special offer has been received from: 1. Company X to purchase 4000 units of the components at a price of $24 per unit. 2. Company Y has offered to purchase 18000 units of the components at a price of $28 per unit The cost structure of the component is as follows: Raw materials $ 6.00 per unit Direct labor $ 6.00 per unit Variable overhead unit Fixed overhead $150.000 per year The normal selling price is $32 per component. Required: Should the offer from Company X or Y firms be accepted? Why or why not? (Show your analysis in detail) $ 8.00 per
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