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The Company ALR has received an order from an unusual customer who requests the supply, in the next two months, of a certain product. As

The Company ALR has received an order from an "unusual" customer who requests the supply, in the next two months, of a certain product. As the company has available production capacity, it could supply the aforementioned order that has the following characteristics:

1.- Order of 10,000 units.

2.- Offer given by the client 1,800,000 euros.

The cost structure of the company A. L. R. for the product in question is as follows:

Raw material 500,000

10,000 u. x 50/u.

direct labor 600,000

3,000 H-MOD x 200/ H-MOD

Variable Overhead Expenses 300,000

100/ H-MOD x 3,000 H-MOD

Fixed Overheads 450,000

150/ H-MOD x 3,000 H-MOD

TOTAL COSTS 1,850,000

Should the Order be Accepted?

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