Someone please help me with this problem?
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Category
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Cost per Unit
|
|
Variable manufacturing costs
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$29
|
|
Fixed manufacturing costs
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$10
|
|
Variable selling costs
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$8
|
|
Fixed selling costs
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$12
|
Capacity cannot be added in the short run and the firm currently sells the product for $65 per unit.
The company is currently producing 180,000 units per month. A potential customer has contacted the firm and offered to purchase 20,000 units this month only. The customer is willing to pay $53 per unit. Since the potential customer approached the firm, there will be no variable selling costs incurred. Should the company accept the special order? Why or why not?