Question
Hello, I need a little help with this accounting question. The following data relate to Antelope Manufacturing: Anticipated sales 50,000 units Normal sales price/unit $10
Hello, I need a little help with this accounting question. The following data relate to Antelope Manufacturing: Anticipated sales 50,000 units Normal sales price/unit $10 Variable manufacturing cost/unit $3 Variable selling and administrative cost/unit $1 Fixed manufacturing cost $75,000 ($1.50/unit) Fixed selling and administrative cost $100,000 ($2.00/unit) Total cost/unit (full absorption) $7.50 Antelope has the opportunity to take a one-time special order from a customer who wants to buy 10,000 units but is only willing to pay $7.00 per unit. The special order will not affect Antelopes anticipated sales to other customers or the companys fixed costs. Required: Should Antelope accept the special order? Required: Should Antelope Manufacturing decrease the selling price of its product to $7 for all of its customers? The marketing manager has argued that this pricing strategy would allow the company to attract new customers and capture a greater share of its market.
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