Soccer Imported Ltd. imports soccer boots from Indonesia. The selling price is $90 per pair of soccer boots (product A). The variable costs are $50 per pair. The fixed costs are $200,000. The manager of the company seeks your help to achieve the best result for the company. She provides you with the additional information:

A one-off special order has been received by a customer, who is willing to buy 200 units (pairs of soccer boots) for $80 per unit. This would require additional fixed costs of $5,000, the variable costs per unit remain the same.

A new supplier has offered the company $40 per pair (product B). This would require additional quality checks and other increases of fixed costs by $52,000. This offer replaces the current position of product A. The company would have a selling price of $85 for product B.

The market capacity is 9,000 units (pairs of soccer boots).

a. Identify the break-even point in units (pairs of soccer boots) under the current position.

b. Determine whether the special order should be accepted with the new customer. (Show all

calculations).

c. Identify some of the problems that could be associated with completing the order.

d. Determine whether the new supplier offer should be accepted. Show all calculations

e. Explain how the company could maximize profit if a mix of the two products was possible.