Essay
Axle and Wheel Manufacturing is approached by a European customer to fill a one-time-only special order for a product similar to one offered to domestic customers.The following per unit data apply for sales to regular customers:
Axle and Wheel Manufacturing has excess capacity.Required:
a.What is the full cost of the product per unit?
b.What is the contribution margin per unit?
c.Which costs are relevant for making the decision regarding this one-time-only special order? Why?
d.For Axle and Wheel Manufacturing, what is the minimum acceptable price of this one-time-only special order?
e.For this one-time-only special order, should Axle and Wheel Manufacturing consider a price of $100 per unit? Why or why not?
Correct Answer:
Verified
Correct Answer:
Verified
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