Best Cupcakes Inc. produces a variety of high-quality cupcakes. The company just received a special order to produce 300 cupcakes with a modified flavour and frosting. Each regular cupcake costs $3 to produce ($2 in total for variable costs and $1 for allocated fixed costs that are common to the company). A regular cupcake is priced at $6. Extra costs for the modified cupcakes would be as follows:

- Extra colouring and flavour required for the modified cupcakes cost $0.50 per cupcake.
- A new shape of baking mould will need to be purchased for $200 (a one-time cost).

The price charged for a modified cupcake is $7.25 each. Best Cupcakes is currently operating at full capacity, so the production and sale of a regular cupcake must be given up for each modified cupcake produced and sold.

Should the company accept the order for the modified cupcakes?

Do not enter dollar signs or commas in the input boxes.
Round all answers to 2 decimal places.

Foregone Contribution Margin per Cupcake $Answer
Variable Cost per Cupcake $Answer
Fixed Cost per Cupcake $Answer
Total Relevant Costs $Answer
Accept or Reject: AnswerAcceptReject

no