Alpha Plumbing has received a special one-time order for 1,500 faucets at $5 per unit. Alpha currently produces and sells 7,500 units at $6 each.
Alpha Plumbing has received a special one-time order for 1,500 faucets at $5 per unit. Alpha currently produces and sells 7,500 units at $6 each. This level represents 75% of its capacity. Production costs for these units are $4.50 per unit, which includes $3 variable cost and $1.50 fixed cost. In order to produce the special order, a new machine needs to be purchased at a cost of $1,000 with a zero salvage value. Management expects no other changes in costs as a result of the additional production. Required: If Alpha wishes to increase its profit by $1,250 through the special order, the size of the order would need to be? Show all calculations
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