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The Score One Company manufactures windows. Its manufacturing plant has the capacity to produce 12,000 windows each month. Current production and sales are 10,000 windows
The Score One Company manufactures windows. Its manufacturing plant has the capacity to produce 12,000 windows each month. Current production and sales are 10,000 windows per month. The company normally charges $300 per window. - Data Table $ 600,000 450,000 Variable costs that vary with number of units produced Direct materials Direct manufacturing labor Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 200 batches * $1,500 per batch Fixed manufacturing costs Fixed marketing costs 300,000 75,000 50,000 $ 1,475,000 Total costs More Info Score One has just received a special one-time-only order for 2,000 windows at $250 per window. Accepting the special order would not affect the company's regular business or its fixed costs. Score One makes windows for its existing customers in batch sizes of 50 windows (200 batches ~ 50 windows per batch = 10,000 windows). The special order requires Score One to make the windows in 40 batches of 50 windows. Requirements - 1. Should Score One accept this special order? Show your calculations. 2. Suppose plant capacity were only 11,000 windows instead of 12,000 windows each month. The special order must either be taken in full or be rejected completely. Should Score One accept the special order? Show your calculations. 3. As in requirement 1, assume that monthly capacity is 12,000 windows. Score One is concerned that if it accepts the special order, its existing customers will immediately demand a price discount of $10 in the month in which the special order is being filled. They would argue that Score One's capacity costs are now being spread over more units and that existing customers should get the benefit of these lower costs. Should Score One accept the special order under these conditions? Show your calculations
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