Question

Accept special sales order? In addition to the product cost information for Lakeside, Inc., in Mini-Exercise 16.1, Lakeside has received an offer from a nonprofit organization to buy 5,000 units at $30 per unit. Lakeside currently has unused production capacity.
In Mini-Exercise 16.1, Lakeside, Inc., produces a product that currently sells for $36 per unit. Current production costs per unit include direct materials, $10; direct labor, $12; variable overhead, $5; and fixed overhead, $5. Product engineering has determined that certain production changes could refine the product quality and functionality. These new production changes would increase material and labor costs by 20% per unit.

Required:
Should Lakeside accept this special sales order?



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  • CreatedOctober 07, 2013
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