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Ludolph Industries has an annual plant capacity of 60,000 units, current production is 51 000 units per year. At the current production volume, the variable
Ludolph Industries has an annual plant capacity of 60,000 units, current production is 51 000 units per year. At the current production volume, the variable cost per unit is $2700 and the fixed cost per unit is $390. The normal selling price of Ludolph's product is $49.00 per unit Ludolph has been asked by Cornhill Company to fill a special order for 6.000 units of the product at a special sales price of $24.00 per unit Cornhill is located in a foreign country where Ludolph does not currently operate Cornhill will market the units in its country under its own brand name, so the special order is not expected to have any effect on Ludolph's regular salos Requirement 1. How would accepting the special order impact Ludolph's operating income? Should Ludolph accept the special order? The special order will Ludolph's operating income by s Thus Ludolph accept the special sales order Requirement 2. How would your analysis change if the special order sales price were to be $39.00 per unit and Ludolph would have to pay an attorney a fee of $17.000 to make sure it is complying with export laws and regulations relating to the special order? Ludolplys operating income by S Thus Ludolph Under these new assumptions, the special order will accept the special sales order
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