Question
Lisa Co. receives an order for one of its products. The order demands a 10% discount from the standard price, but would be for a
Lisa Co. receives an order for one of its products. The order demands a 10% discount from the standard price, but would be for a sizable volume: 13,000 units. Lisa typically sells the product for $20 per unit and incurs production costs of $401,500 fixed and $800,000 variable for the 80,000 units it produces in an average month. In addition, Lisa incurs $1,240,000 in fixed marketing and administration costs. Lisa factory is currently operating at full capacity.
Should Lisa accept the special order? Provide proof of your answer. (No word limit for this, but try to be concise.)
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