Question
Fishing Run Corporation received a special order request for 20,000 new fishing poles at a sales price of $30 each. This is a $10 reduction
Fishing Run Corporation received a special order request for 20,000 new fishing poles at a sales price of $30 each. This is a $10 reduction in the normal sales price. The variable costs per fishing pole are $20. The total fixed costs of $110,000 will not change. Which of the following is TRUE?
A. Management should accept the order if the variable costs per unit and fixed costs in total will not change with the order.
B. Management should accept the order if they have excess capacity.
C. Management should consider not accepting the order if the customers will expect the price decrease as the standard price in the future.
D. All of the above are true.
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