Question
need some help on the following problems... ZBar Supplies is currently operating below its facility capacity producing 21,000 tape dispensers per month. ZBAR has the
need some help on the following problems...
ZBar Supplies is currently operating below its facility capacity producing 21,000
tape dispensers per month. ZBAR has the capacity to produce up to 25,000
units without incurring any additional fixed costs. The current selling price is $5.00
per dispenser. Management estimates variable costs per unitto be $2.00
Monthly fixed costs grow slightly from year to year but are currently around $35,000
Marathon Distributors, not a normal customer, has approached ZBar to buy 3,500
dispensers next month on a "white label" basis for a per unit price of $4.10
Prepare the incremental analysis that ZBar should use to evaluate this offer.
You may assume that none of ZBAR's current customers are affected.
Per Unit Total Order
1 Incremental Revenues are: ??? ???
2 Direct production costs are: ??? ???
3 Incremental costs not included
in your answer to Q10 are: ??? ???
(may be zero)
4 Opportunity costs are: ??? ???
(may be zero)
5 Net Profits for the special order
are estimated to be: ??? ???
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