Question
Thornton Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Thorntons normal sales territory, asks Thornton to pour 44 slabs
Thornton Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Thorntons normal sales territory, asks Thornton to pour 44 slabs for Lancings new development of homes. Thornton has the capacity to build 500 slabs and is presently working on 220 of them. Lancing is willing to pay only $2,630 per slab. Thornton estimates the cost of a typical job to include unit-level materials, $930; unit-level labor, $480; and an allocated portion of facility-level overhead, $1,290.
Required
Calculate the contribution to profit from the special order. Should Thornton accept or reject the special order to pour 44 slabs for $2,630 each? Find the contribution to profit.
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