Question
. Belton Concrete Company pours concrete slabs for single-family dwellings. Clint construction Company, which operates outside Beltons normal sales territory, asks Belton to pour 200
. Belton Concrete Company pours concrete slabs for single-family dwellings. Clint construction Company, which operates outside Beltons normal sales territory, asks Belton to pour 200 slabs for Clints new development of homes. Belton has the capacity to build 2,400 slabs and is presently working on 2,000 of them. Clint explains that she is willing to pay only $2,200 per slab.
Beltons costs when it produces 1,500 units are given as follows:
Direct Material Cost $ 2.400.000
Direct Labor 1.200.000
Facility Level Manufacturing Overhead 600.000
Belton estimates 5% increase in Facility Level Manufacturing Overhead if it accepts the special order.
Required: Should Belton accept or reject the special order to pour 200 slabs for $2,000 each? Support your answer with appropriate computations.
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