Question - The following data pertains to North PR Retail Stores. Usual (normal) average selling price per unit: $9.00; Variable cost per unit: $6.00; Total annual non-avoidable fixed cost: $100,000.00; Normal annual sales: 50,000 units; Maximum level of annual sales: 75,000 units. Assume four companies from other region offer North PR Retail Stores to purchase 10,000 units and the price per unit offered is
1. Company 1: $5.95;
2. Company 2: $6.00;
3. Company 3: $7.99;
4. Company 4: $8.00.
What should be the decision on these offers? Identify some non-financial factors that influence the company decision to reject or not the offer for companies 1, 2, 3, and 4.
Find the relationship if exists between the offers and total non-avoidable fixed costs of the company and non-avoidable fixed costs per unit of the company.