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Cayman Products is currently manufacturing and selling 300,000 packages of underwater markers at a selling price of $4 per package. Costs related to the production
Cayman Products is currently manufacturing and selling 300,000 packages of underwater markers at a selling price of $4 per package. Costs related to the production and sale of the packages are as follows: Direct materials $1.28 per package Direct labor $0.32 per package Variable overhead $0.72 per package Fixed overhead $72,000 Fixed selling and administrative $200,000 Cayman's total capacity is 320,000 packages. A new customer would like to make a one time purchase of 50,000 packages for $3.45 per package. Additional fixed costs of $7, 500 would be incurred if the special order is accepted. Should the special order be accepted? What is the difference in net income between accepting the special order and rejecting the special order
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