In March of Year 3, Memories, Inc. receives a special order from a local museum to purchase 5,000 dolls and 3,000 replicas for a special exhibit. Required:

A. Assuming that MI has sufficient excess capacity, what is the minimum price the company would be willing to accept for this special order? Assuming that the company does not have sufficient excess capacity, what minimum price would be acceptable? What qualitative factors should MI consider when deciding whether to accept the special order?

B. MI is nearing its manufacturing capacity and needs to consider ways to increase throughput. What options does the company have to increase capacity? What bottlenecks does it face? What recommendations would you make?