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Kodak has the capacity to manufacture 600,000 cameras annually. Based on past sales and present trends, Kodak expects to sell 500,000 cameras for $300 each.
Kodak has the capacity to manufacture 600,000 cameras annually. Based on past sales and present trends, Kodak expects to sell 500,000 cameras for $300 each. Fixed manufacturing costs for the year are expected to be $2,000,000; variable manufacturing costs are expected to be $150 per unit. Projected sales leave an excess capacity of 100,000 cameras, and a discount chain would like to purchase 120,000 cameras for a reduced price of $200. Should Kodak accept the order?
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