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Nationwide Windows can produce 10,000 windows per year. Its normal year of operations involves the following: Sales (8,000 units @ $220) Manufacturing cost Variable
Nationwide Windows can produce 10,000 windows per year. Its normal year of operations involves the following: Sales (8,000 units @ $220) Manufacturing cost Variable per unit Fixed Selling and administrative cost Variable (commission) per unit on sales Fixed $1,760,000 150 260,000 12 60,000 During the year, Nationwide is approached by a contractor to bux 1.500 windows for $165 each The variable sales commission is set to be a flat fee of $12,000 for the special order. The fixed costs are not affected by the decision. Required: 1. Should Nationwide Windows accept or reject the special order for 1,500 windows at $165 each? Why? 2. Assume, instead, that the contractor needs a total of 2.500 windows; all other information remains the same. Should Nationwide accept or reject the special order for 2,500 windows at $165? Why?
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