A new customer has surfaced. That customer has asked you to consider producing a
ID: 2502678 • Letter: A
Question
A new customer has surfaced. That customer has asked you to consider producing a special one-time order for them. This special order would require a modification to the recipe that will slightly increase the variable cost per unit. Furthermore, there would be a small fixed cost addition. The details for the order as follows:
Conduct a differential analysis regarding this special order. Would you accept this order under the conditions provided? Explain and defend your position.
Modifications would require the following changes:Explanation / Answer
60,000*(1.4)-60000*0.04-5500=$76100
So Profit is greater than zero so Will take the project.