Question
Jupiter Corporation manufactures skateboards. Several weeks ago, the firm received a special-order inquiry from Venus, Inc. Venus desires to market a skateboard similar to one
Jupiter Corporation manufactures skateboards. Several weeks ago, the firm received a special-order inquiry from Venus, Inc. Venus desires to market a skateboard similar to one of Jupiters and has offered to purchase 11,000 units if the order can be completed in three months. The cost data for Jupiters model no. 43 skateboard follow. Direct material $ 8.20 Direct labor: 0.25 hours at $9.00 2.25 Total manufacturing overhead: 0.5 hours at $20 10.00
Required: 1-a. Calculate the net profit increase or (decrease) from accepting the special order. 1-b. Assume that present sales will not be affected. Should the order be accepted from a financial point of view (i.e., is it profitable)?
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