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TexasRunners manufactures cricket bats that sells for $37 each. At capacity, the corporation can produce 50,000 units a year. The costs of producing and selling
TexasRunners manufactures cricket bats that sells for $37 each. At capacity, the corporation can produce 50,000 units a year. The costs of producing and selling 50,000 units are: Total Costs Cost per Bat $16 4 1 Direct materials Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total costs $ 800,000 200,000 50,000 150,000 200,000 3 4 2 100,000 $1,500,000 $30 Required: Suppose TexasRunners is currently producing and selling 40,000 units. At this level of production and sales, its fixed costs are the same as given in the preceding table. HighStars Company wants to place a one-time-only special order for 10,000 units at $23 each. Texas Runners will incur no variable selling costs for this special order. Should Texas Runners accept this one-time-only special order? Show your calculations
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