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Baldwin Golf Co. produces golf equipment including a golf bag that sells for $200. Although the company's production capacity is 5,000 bags per year, only

Baldwin Golf Co. produces golf equipment including 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 ($100 per bag) $400,000 Unit-level labor cost ($50 per bag) $200,000 Unit-level overhead cost ($12.00 per bag) $ 50,000 Batch-level set-up costs ($4,000 per batch of 1,000 bags) $ 16,000 Product-level costs per year (golf bag advertising; fixed cost) $ 15,000 Allocated portion of facility costs (annual factory lease cost) $ 30,000

Golf Mart Stores is not one of Baldwins regular customers. Golf Mart has made an offer to Baldwin to purchase 1,000 golf bags as a one-time special purchase at a price of $170 per bag.

Required: a) Prepare a quantitative analysis that indicates whether the special order should be accepted or rejected.

b) Identify at least one qualitative factor which Baldwin Co. should consider in this special order decision?

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