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Perro Muerto has a capacity to manufacture 10,000 bricks per week. The operations for the week are as follow: Sales (8,500 units @$14 each) $119,000
Perro Muerto has a capacity to manufacture 10,000 bricks per week. The operations for the week are as follow:
Sales (8,500 units @$14 each) $119,000
Manufacturing costs
Variable $8 per unit
Fixed $12,000
Manufacturing costs
Variable commisions $1.5 per unit
Fixed $2,000
Perro Muerto is offered a special order of 1,500 bricks at a selling price of $10 each. Assume these units are subject to 33% INCREASE of the usual commission rate per unit. There is no effect on the regular sales. Should Perro Muerto take the special order?
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