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Badger Golf Supply produces a golf bag that sells for $200. Although the company's production capacity is 5,000 bags per year, only 4,000 bags are
Badger Golf Supply produces a golf bag that sells for $200. Although the company's production capacity is 5,000 bags per year, only 4,000 bags are currently being produced and sold. The production costs for 4,000 bags are as follows: Unit-level material cost $400,000 Unit-level labor cost $200,000 Unit-level overhead $50,000 Batch-level set-up costs (500 units per batch) $20,000 Product-level costs $15,000 Allocated facility-level costs $30,000 Golf Mart Stores has offered to purchase 1,000 golf bags as a one-time special purchase at a price of $175 per bag. Required: 1. Prepare a quantitative analysis that indicates whether the special order should be accepted. 2. What qualitative factors should be considered in this special order decision
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