Question
Noda Enterprises manufactures and sells study guides for learners at schools. The selling price of each study guide is R120. The companys current output is
Noda Enterprises manufactures and sells study guides for learners at schools. The selling price of each study guide is R120. The companys current output is 6 000 units per month, which represents 75% of the companys production capacity of 8 000 units. The Gauteng Department of Education offered to buy 2 000 study guides as a special order at R70 each to provide to indigent learners. Fixed costs for the month amount to R210 000 and variable costs amount to R366 000.
1.1 Study the information given above and advise Noda Enterprises whether they should accept the special order or not. Motivate your answer with the relevant calculations.
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