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Pls answer all questions in details ASAP Bye-Cycle Company LTD produces racing bicycles and recreational bicycles. The Company has received a special order of 8,000
Pls answer all questions in details ASAP
Bye-Cycle Company LTD produces racing bicycles and recreational bicycles. The Company has received a special order of 8,000 units of racing bicycles from Kelab Sukan Extreme for a bicycle racing event organized for its club members. At the moment, Bye-Cycle has excess production eapacity. The special order is an incomegenerating opportunity for the Company. According to the Production Manager, the request for RM187 per bicycle by the Club is below its production costs. Therefore, the Financial Controller is against accepting the special order since it may cause the Company to suffer a loss. Despite the possibility of loss, the Human Resource Manager perceives it differently. To him, by accepting the special order, jobs are created to sustain cmployability which may improve the Company's image. The Company typically charges RM200 per racing bicycle, with the total production costs as follows: No sales and administration costs will be incurred for the special order. Reguired: a) Show your computation of whether the Company should accept or reject the specialorder. b) By referring to the Human Resource Manager's view, diseuss two (2) advantages of accepting the special order, although it reduces the Company's profitability. c) Assume the Company is operating at its full capacity. Should the special offer be accepted or |rejected? Show your computation clearly. d) Determine the minimum price to be charged for the special order given that: i. The Company is operating at its full capacity. ii. The Company has exoess capacityStep by Step Solution
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