Question 4 Rawlins Inc. produces and sells various sports equipment. In one particular location they produce a high end baseball glove that they sell to their current customers for $600 each. This location has the capacity to produce 1,400 gloves per month. They are currently producing and selling 1,325 gloves per month. They have been approached by a sports equipment retailer to produce a one time special order of 350 gloves with a selling price of $500 each. If they accept this special order they must produce all 350 gloves and reduce the number of gloves produced and sold to their regular customers, given their capacity limit of 1,400 gloves per month. The production costs for producing 1,400 gloves are as follows: Data: Cost per Total Costs Glove Variable Costs: Direct material Labor and other variable costs Fixed Manufacturing Overhead Total Costs $135,00 $120,00 $165,00 $420,00 $189,000 $168,000 $231,000 $588,000 Required: 1. a) Should Rawlins accept this special order? (Will they be better off financially if they accept, compared to their current operations) Calculations 1. b) Should they accept the special order if the capacity is 1,700 gloves per month? Calculations 2 Rawlins has recently been made aware that this potential supplier has been experiencing financial problems. How might this affect Rawlins decision to accept the special order (regardless of the quantitative analysis)