Question
Sunnyvale Inc. has the following production information: Total capacity 36,000 Units produced 34,000 Sales and production cost data per unit: Sales price $ 45 Variable
Sunnyvale Inc. has the following production information:
Total capacity | 36,000 | ||
Units produced | 34,000 | ||
Sales and production cost data per unit: | |||
Sales price | $ | 45 | |
Variable manufacturing costs | 15 | ||
Variable selling costs | 2 | ||
Fixed manufacturing costs | 20 | ||
Fixed marketing costs | 6 | ||
The company received a special order request of 7,800 units from its customer. The customer is willing to pay $210,000 in total for the order.
Assume there would be no other costs associated with the special order except a one-time $5,300 inspection cost.
Hint: Variable selling costs are not part of the cost in the special order.
required:
1-1. If the company accepts the special order, how much is the loss in their regular sales (i.e., their opportunity costs)? (Use absolute value. Put "0" if there is no loss in the regular sales.)
1-2. What is the total cost of filling this special sales order, including all relevant and opportunity costs?
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