This is Canadian Accounting (Cost Accounting) !! DeWitt Inc. is approached by a European customer to fill a one-time special order for a product similar to one offered to domestic customers. The following per-unit data applies for sales to regular customers:

Direct materials = $33 Direct labour = 15 Variable manufacturing overhead = 24 Fixed manufacturing overhead = 38

Total manufacturing costs = $114 (Total) Markup (40%) = 44 Selling price per unit $154 (Total)

The European customer is offering a price of $105 per unit. DeWitt Inc. has excess capacity and would not displace any regular customer orders to complete the special order.

Required:

a) Determine if DeWitt should accept the special order from a quantitative perspective. Explain how much DeWitt would either earn or lose if the special order consists of 10,000 units. Show your calculations!

b) Identify at least two qualitative factors that DeWitt should consider in the evaluation of whether to accept or reject the special order. Explain why each factor is important in this situation. Thumbs Up for correct Answer !