ASAP!!

Po Piah Ltd (PPL) is approached by a Japanese customer to fulfill a one-time-only special order of 5,000 units for a product similar to one offered to domestic customers. The following per unit data apply for sales to regular customers:

Direct materials	$50
Direct labor	55
Variable manufacturing support	50
Fixed manufacturing support	120
Total manufacturing costs	275
Markup (80%)	220
Target selling price	$495

PPL has excess capacity.

Required:

1. What is the contribution margin per unit?
   3. marks)

2. Which costs are relevant for making the decision regarding this one-time-only special order? Why?
   3. marks)

3. For PPL, what is the minimum acceptable price of this one-time-only special order?

(2 marks)

4. For this one-time-only special order, should PPL consider a price of $200 per unit? Why or why not?

(2 marks)

5. Refer to part (d) above, what would the incremental profit (or loss) be if the special order is accepted?
   3. marks)
6. State two important qualitative factors to be considered before the order is accepted or rejected.

(2 marks)