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SITUATION 4: Special Orders CEG Ski Corporation, has received a special order from an Austrailian Company for 500 wakeboards. The Aussie company has offered to
SITUATION 4: Special Orders CEG Ski Corporation, has received a special order from an Austrailian Company for 500 wakeboards. The Aussie company has offered to pay $300 per wakeboard. Should CEG agree to the special order. Assume that this order will not interfere with regular production and CEG has the capacity to complete the order. Current information about the production of CEG wakeboards (w/o special order) is as follows. Wakeboards 500,000 240,000 260,000 Sales (1,000 units) Variable expenses Contribution margin Fixed expenses Traceable Advertising Depreciation - Special Equipment Salary of Product Line Managers Allocated Common Fixed Costs Net operating income 15,000 14,000 30,000 30,000 171,000
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