A Company Is Currently Operating at 70% Capacity Producing 8,000

Essay

A company is currently operating at 70% capacity producing 8,000 units.Cost information relating to this current production is shown in the following table:
$$\begin{array} { | l | r | } \hline & \text { Per Unit } \\\hline \text { Sales price } & \$ 15 \\\hline \text { Direct material } & \$ 3.20 \\\hline \text { Direct labor } & \$ 7.10 \\\hline \begin{array} { l } \text { Variable } \\\text { overhead }\end{array} & \$ 0.05 \\\hline \text { Fixed overhead } & \$ 0.60 \\\hline\end{array}$$
The company has been approached by a customer with a request for a special order for 1,500 units.The sales price per unit for this special order is $10.Should the company accept the special order?