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PLEASE SHOW ALL WORK AND PROVIDE ALL CALCULATIONS. NOT JUST THE ANSWERS. Question 3: Louis Luggage produces many different types and sizes of luggage. Their
PLEASE SHOW ALL WORK AND PROVIDE ALL CALCULATIONS. NOT JUST THE ANSWERS.
Question 3: Louis Luggage produces many different types and sizes of luggage. Their best seller, the Weekend Warrior, sells for $140. Louis has been asked by Macrosoft, Inc. to produce 2,000 of the Weekend Warrior with a specially designed fingerprint security lock and with the Macrosoft company logo. These will be given to Macrosoft employees who must travel frequently for work. Macrosoft has offered to pay $122 per suitcase. Louis' costs related to the Weekend Warrior consist of variable costs per unit of $50 and fixed costs per unit of $38 of which $9 are unavoidable. In addition, Louis will encounter additional variable costs of $10 per unit for the security lock component and $4,300 as a one-time fixed cost for the Macrosoft label. 1. What is the operating income generated by the special order? 2. Should the special order be accepted? Why or why not? 3. What are three other considerations that Louis, or any company, should think about when choosing whether to accept a special order? Question 3: Louis Luggage produces many different types and sizes of luggage. Their best seller, the Weekend Warrior, sells for $140. Louis has been asked by Macrosoft, Inc. to produce 2,000 of the Weekend Warrior with a specially designed fingerprint security lock and with the Macrosoft company logo. These will be given to Macrosoft employees who must travel frequently for work. Macrosoft has offered to pay $122 per suitcase. Louis' costs related to the Weekend Warrior consist of variable costs per unit of $50 and fixed costs per unit of $38 of which $9 are unavoidable. In addition, Louis will encounter additional variable costs of $10 per unit for the security lock component and $4,300 as a one-time fixed cost for the Macrosoft label. 1. What is the operating income generated by the special order? 2. Should the special order be accepted? Why or why not? 3. What are three other considerations that Louis, or any company, should think about when choosing whether to accept a special orderStep by Step Solution
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