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Crayson Company manufactures a product with the following production and sales costs: The company presently is selling 120,000 units annually at a selling price of
Crayson Company manufactures a product with the following production and sales costs: The company presently is selling 120,000 units annually at a selling price of $25 each. A special order has been received from a distributor who wants to purchase 25,000 units at a special price of $20 each. Regular sales would not be affected by this order and the order could be filled without any impact on total fixed costs because it is operating below maximum capacity. Sales commissions on the special order would be reduced to $1 per unit. Required: Determine whether the company should accept the special order. Explain your answer, showing computations
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