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Yoda's Stick Company manufactures a special walking stick with the following full unit costs for 6,000 units: Direct materials $160 Direct labor 80 Manufacturing overhead
Yoda's Stick Company manufactures a special walking stick with the following full unit costs for 6,000 units: Direct materials $160 Direct labor 80 Manufacturing overhead (40% variable) 240 Selling expenses (60% variable) 80 Administrative expenses (10% variable) 40 Total per unit $600 A company recently approached Yoda with a special order to purchase 1,000 units for $575. Yoda currently sells the models to dealers for $1,100. Capacity is sufficient to produce the extra 1,000 units. Since Yoda was approached by the buyer, no selling expenses would be incurred on the special order. Required: A) Ignoring the special order, determine Yoda's profit on production and sales of 6,000 units. Ignore taxes in these analyses, they are not levied in Dagobah. Show your calculations. B) Should Yoda accept the special order if his goal is to maximize short-run profits? Determine the impact on profit of accepting the order. Show your calculations. C) When making a special-order decision, what non-quantitative aspects of the decision should Yoda consider? For the toolbar roce AT10 CarATEMF10 MA
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