BYP7-3 (Weygand, Kimmel, and Kieso, 2015, p. 312) Beverly Hills Fan Company was founded in 1983 and closed through bankruptcy in 1996. It was located in Woodland Hills, California. It was a relatively small company, with 23 employees and less than $10,000,000 in sales. In 1992, management thought they had a great growth opportunity in the ceiling fans and lighting market. They were very optimistic about the growth opportunity, especially in the Mexican and Canadian markets. Below is the letter from the company's president in the company's latest annual report: "An aggressive product development program was initiated over the past year, which has resulted in plans to introduce new models of ceiling fans to be introduced to the market this year. Famous designer Ron Rezek created several models of fans for Beverly Hills Fan and L.A. Fan, including a Showroom Collection designed specifically for the architect and designer markets. Both have received critical acclaim and the commitments to order this year are outstanding. Additionally, our Custom Color fans and special order fans continue to increase in popularity and sales as our customers demand fans that match their interior decorating tastes. Today, the Beverly Hills Fan Company offers a line of more than 100 ceiling fan models in contemporary, traditional, and transitional styles."

Instructions:

1. Answer the following two (2) questions in the forum, justify your answers, and comment on your colleagues' answers.

2. What points should management consider before deciding to offer special order fans to customers? 3. How would incremental analysis have been used to help management in this decision?