Silver Lake Cabinets is approached by Ms. Jenny Zhang, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. The following per unit data apply for sales to regular customers:

Direct materials $100

Direct labour 125

Variable manufacturing support 60

Fixed manufacturing support 75

Total manufacturing costs $360

Markup (60%) 216

Targeted selling price $576

Silver Lake Cabinets has excess capacity. Ms. Zhang wants the cabinets in cherry rather than oak, so direct material costs will increase by $30 per unit.

Required:

a. For Silver Lake Cabinets, what is the minimum acceptable price of this one-time-only special order?

b. Other than price, what other items should Silver Lake Cabinets consider before accepting this one-time-only special order?

c. How would the analysis differ if there was limited capacity?