Question $16$

Geographer Company produces measuring tools for engineers. Their machinery has a capacity of $4,500$ hours, but the Company currently uses $4,000$ of those hours.

Geographer Company currently produces and sells $2,500$ units at a selling price of $$50.$ Total Variable Costs are $$15$ per unit, which includes $$5$ per unit of boxing and

packaging. The fixed costs for the company are $$80,000.$

Landslide Company approached Geographer Company with an offer to buy $320$ units at a special price of $$30$ per unit. If Geographer Company accepts this offer, they

would use up the remaining $500$ hours they had available. Additionally, Geographer would have to pay overtime to workers producing the extra units, so variable

manufacturing costs would increase by an additional $$10$ per unit, however, the company would save on the $$5$ boxing and packaging per unit.

REQUIRED:

Would you accept the special order from Landslide Company? Why or why not? Please provide details in explaining your reasoning for accepting or rejecting

the order.