Question
Terrain Tents produces travel tents. The company's production capacity is 10,000 tents a year. Today, the company produces 7,000 pcs a year. The average selling
Terrain Tents produces travel tents. The company's production capacity is 10,000 tents a year. Today, the company produces 7,000 pcs a year. The average selling price is 650 kr / pcs. Production costs are all variable (variable costs) and consist of direct raw materials: 90 kr / pcs, direct wages: 200 kr / pcs and indirect costs 15 kr / pcs. Another operating cost is rent, it is 110 kr / pcs. A foreign party has contacted Terrain Tents and requested to purchase 2,500 pcs of travel tickets at 320 kr / pcs. Shall Terrain Tents accept or reject the order (inquiry). Please justify your answer by calculation.
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