Question
Company XYZ manufactures coolers. Recently it received a special order from a customer. Complete the following items by using the information in the exhibits. Select
Company XYZ manufactures coolers. Recently it received a special order from a customer. Complete the following items by using the information in the exhibits. Select from the option list provided or enter the appropriate amounts in the associated cells. Indicate negative numbers by using a leading minus (-) sign.
Dear Monica,
A customer wants to place an order for 50 coolers. The customer is willing to pay $75 per cooler. Usually, we sell a cooler for $100. Normal profit per unit is as follows:
Selling price | $100 |
Cost: variable | (60) |
Contribution margin | $ 40 |
Minus: allocated fixed costs | 30 |
Normal profit | $ 10 |
We have excess capacity. Please help us to determine whether we should accept the customers special order.
Best,
Blaine
1. Effect on net income of accepting special order 2. Whether to accept 3. Minimum unit price to accept special order 4. Effect on net income of accepting special order without excess capacity
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