Question
Target produces clothing. In 2022, it produced 100,000 pieces of clothing that were sold at $500 per unit. Chart: Cost and revenue information about Target
Target produces clothing. In 2022, it produced 100,000 pieces of clothing that were sold at $500 per unit.
Chart: Cost and revenue information about Target at the end of 2022 ($000)
NET SALES 50,000
Manufacturing overhead 8,000
Labor 10,000
Materials 15,000
SG&Expenses 12,000
Note*: Manufacturing overhead, Labor, and Materials are directly related to the production
process
1.) In 2023 Target receives a special order (i.e., a one-time transaction) from a client to supply 1,000 pieces of clothing within 7 days. Target will likely be able to accommodate this new order in its current facilities. Assume that the client will pay $400 per clothing item. Should Target accept this clients order? (To analyze this decision, Target's management team uses the information in the chart above.
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