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Circuit Masters, Inc. (CMI), is presently operating at 80% of capacity and manufacturing 133,000 units of a patented electronic component. The cost structure of the
Circuit Masters, Inc. (CMI), is presently operating at 80% of capacity and manufacturing 133,000 units of a patented electronic component. The cost structure of the component is as follows: An Italian firm has offered to purchase 21,300 of the components at a price of dollar30.5 per unit. FOB CMI's plant. The normal selling price is dollar35.9 per component. This special order will not affect any of CMI's "normal" business. Management calculated that the cost per component is dollar30.5. so it is reluctant to accept this special order. Required: Calculate the fixed overhead per unit? Fixed overhead per unit ] Is the cost calculation appropriate? Yes No Should the offer from the Italian firm be accepted? The offer should be accepted. The offer should not be accepted
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