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Alpha Cables Ltd manufactures electric cables for households. The company has capacity to produce 16,000 units per month. However, the current plans call for monthly
Alpha Cables Ltd manufactures electric cables for households. The company has capacity to produce 16,000 units per month. However, the current plans call for monthly production and sales of 10,000 units at $15 each. Cost per unit is $13, including Direct materials $6.25; Direct labor $3.75; Fixed manufacturing overheads $1.50; Variable selling expenses $0.25: Fixed administrative expenses $1.25.
Should the company accept a special order for 6,000 units at $10.50 per unit?
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