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You run a business on campus and sell sweatshirts with SBU logos to students at a regular price of $50. Your financial results for
You run a business on campus and sell sweatshirts with SBU logos to students at a regular price of $50. Your financial results for last month are summarized in the following contribution margin statement: Last Month Sales volume (#units) 100 Revenue Variable costs $5,000 $2,000 Contribution Margin $3,000 Fixed costs Profit $1,800 $1,200 Special order: You've been approached by a student who wants to buy 20 sweatshirts for a student club at a discounted price of $30 per unit. You have enough spare capacity to fulfill this special order without cutting back on your regular business (100 units at $50). 1. Your total profit with this special order is $ 2. If taking the special order, the incremental increase in profit is $ 3. Should you take the special order? Enter Y for yes or N for no.
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