Special order, qualitative factorsBeautiful Biscuits (BB) sells biscuits, brownies, and beverages to small local shops. The selling price per brownie is $1.25, the variable cost is $0.75, and the average cost is $1.00. The principal of a primary school asked BB to provide 10 dozen brownies for its spring picnic. The principal wants to buy the brownies at BB's cost. Unlike regular sales, each special order brownie must be delivered in a plastic container to protect it from dust. The containers cost $0.05 each. The brownies can be prepared ahead of time when workers are not busy.

REQUIRED

(a) Under the general decision rule for special orders, what is the minimum price per brownie that BB's management should accept?

(b) If the principal can pay no more than $0.80 per brownie, should BB take the order? Why or why not?

(c) List several qualitative factors that could affect BB's decision if the special order price for brownies is $0.80.