Q6

Zentech Phone Gear Inc. produces high quality, durable protective cases for a variety of cellular phones. The company just received a special order to produce 410 units of a modified case for a specific phone model. The unit cost for the regular case is dollar 30 (dollar 16 in total for variable costs and dollar 14 for allocated fixed manufacturing overhead that is common to the company). A regular case is priced at dollar 48/unit. Extra costs for the modified case would be as follows: - Extra paint and plastic required for the modified case costs dollar 2 per unit. - Adjustments to the design of the modified case costs dollar 1, 900 (a one-time cost). The price charged for a modified case is dollar 54/unit. For each modified case produced and sold, the production and sale of a regular case must be given up. (i.e. Zentech Phone Gear is currently operating at full capacity). Should the company accept the order for the modified cases? Do not enter dollar signs or commas in the input boxes. Round Fixed Cost per Unit and Total Relevant Cost to 2 decimal places. Foregone Contribution Margin per Unit: dollar Variable Cost per Unit: dollar Fixed Cost per Unit: dollar Total Relevant Costs: dollar Accept or Reject