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Mohave Corp. makes several varieties of beach umbrellas and accessories has been approached by a company called Lost Mine Industries about producing a special order

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Mohave Corp. makes several varieties of beach umbrellas and accessories has been approached by a company called Lost Mine Industries about producing a special order for a custom umbrella caled the Uimate Shade (US). The special-order umbrellas with the Lost Mine Company logo would be distributed to participants at an upcoming convention sponsored by Lost Mine Lost Mine has offered to buy 1,000 of the US umbrelas at a price of $12 each. Mohave currently has the excess capacity necessary to accept the offer. The following information is related to the production of the US umbrella: Direct materials Direct labor Variable manufacturing overhead Fored manufacturing overhead Total cost Regular sales price $20.00 Required: 1. Compute the incremental profit for loss) from accepting the special order Profit for Los) increases by S 5.600 2. Should Mohave accept the special order? Yes No 3. Suppose that the special order had been to purchase 2,100 umbrellas for $8.00 each. Hecompute the incremental profit or loss from accepting the special order under this scenario. Proft for Low by 2. Should Mohave accept the special order? Yes NO 3. Suppose that the special order had been to purchase 2100 umbrelles for $1100 each. Recom e the increment profit or loss from accepting the specin order under this scenario Profit for Loss) by 4. Assume that Mohave is operating at Pull capacity Calculate the special order price per unit at which Mohave would be indifferent between accepting or rejecting the special order. Special Order Price per Unit

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