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Blowing Sand Company has just received a one-time offer to produce 10,000 units of its Gusty model fan for a price of $22 each. The
Blowing Sand Company has just received a one-time offer to produce 10,000 units of its Gusty model fan for a price of $22 each. The Gusty model costs $26 to produce ($17 in variable costs and $9 of fixed overhead). Because the offer came during a slow production month, Blowing Sand has enough excess capacity to accept the order.
I figured out the right answer to this problem. You take $22 - $17 = $5 * 10,000 units = $50,000 1. They should order. 2. Increase in profit of $50,000
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