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Hattatat Corporation makes camping hats. One hat works very well against mosquitoes and usually sells for 15. Adventure Tours (AT) wants to purchase 15,000 hats
Hattatat Corporation makes camping hats. One hat works very well against mosquitoes and usually sells for 15. Adventure Tours (AT) wants to purchase 15,000 hats at 5.30 each to give to people booking jungle holidays with them. Costs per hat are as follows: No variable marketing costs would be incurred. Hattatat is operating significantly below the maximum productive capacity. No fixed costs are avoidable. However, AT wants its own logo and colors on the hats, which must be achieved via a logo patch on the side. The cost of the patches is 0.03 per hat and a special machine costing 3,000 would be required to affix the patches. After the order is complete, the machine would be scrapped. Should the special order be accepted? Please briefly explain financial and non-financial factors that lead to your recommendation
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