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Hope Company has received a request from University of Bahrain to produce and sell 5,000 Chairs for students in the classes at special price of
Hope Company has received a request from University of Bahrain to produce and sell 5,000 Chairs for students in the classes at special price of $45 each The normal selling price is $60, and its unit product cost is $37 as shown below: $15 Direct materials Direct labor Mamfacturing overhead Unit product cost $37 Additional information: 50% of the manufacturing overhead is variable. University of Bahrain asked the company to print the university logo on each chair which cost Hope Company $2 for each chair, and also asking to add stand for each chair which need more direct materials costing $20,000. To fulfill the special sale order, Hope Company has to purchase special machine costing $50,000 that can be sold after using in the special sale order for $20,000. This order should have no effect on the company's other sales. The production manager says that she can handle the special order without disrupting any of the company's regular scheduled production Required: Answer each of the following questions 1. Determine whether Hope Company has to accept or reject this offer. Answer Per unit Tota Total Decision
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