Requirements

Data table

Suppose Runner is currently producing and selling $26,000$ bats. At this level of production and sales, its fixed costs are the same as given in the preceding table. Ruth Corporation wants to place a one$-$time special order for $22,000$ bats at $$24$ each. Runner will incur no variable selling costs for this special order. Should Runner accept this one$-$time special order? Show your calculations.

Now suppose Runner is currently producing and selling $48,000$ bats. If Runner accepts Ruth's offer it will have to sell $22,000$ fewer bats to its regular customers. $($a$)$ On financial considerations alone, should Runner accept this one$-$time special order? Show your calculations. $($b$)$ On financial considerations alone, at what price would Runner be indifferent between accepting the special order and continuing to sell to its regular customers at $$31$ per bat? $($c$)$ What other factors should Runner consider in deciding whether to accept the one$-$time special order?

$\backslash$table$[[,$Cost per Bat,Total Costs$],[$Direct materials,$$,10$$$,480,000],[$Direct manufacturing labor,,$2,96,000],[$Variable manufacturing overhead,,$1,48,000],[$Fixed manufacturing overhead,,$4,192,000],[$Variable selling expenses,,$3,144,000],[$Fixed selling expenses,,$5,240,000],[$Total costs,$$,25$$$,1,200,000$