Lisa's Golf Specialties, a French Company, manufactures golf accessories. One of the more popular accessories is...
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Lisa's Golf Specialties, a French Company, manufactures golf accessories. One of the more popular accessories is the head cover shaped as a tiger (in the spirit of tiger woods) Currently, Lisa makes 500 tiger head covers per week, at a unit cost of 3.5 euros, which include both fixed and variable costs. Lisa sells the tiger head covers to distributors for 4.25 euros. A Japanese distributor, Mr. Fuji has proposed to buy an additional 100 tiger head covers per week for 2 euros. Lisa does have the capacity to produce the extra 100. With 600 tiger cover head covers in weekly production, the per unit costs would now be 3.1 euros. 1 From a financial viewpoint should Lisa accept Mr Fuji's offer? 2 what is the fixed cost, what is the variable cost per unit? 3 What other qualitative factors need to be considered in this decision? Lisa's Golf Specialties, a French Company, manufactures golf accessories. One of the more popular accessories is the head cover shaped as a tiger (in the spirit of tiger woods) Currently, Lisa makes 500 tiger head covers per week, at a unit cost of 3.5 euros, which include both fixed and variable costs. Lisa sells the tiger head covers to distributors for 4.25 euros. A Japanese distributor, Mr. Fuji has proposed to buy an additional 100 tiger head covers per week for 2 euros. Lisa does have the capacity to produce the extra 100. With 600 tiger cover head covers in weekly production, the per unit costs would now be 3.1 euros. 1 From a financial viewpoint should Lisa accept Mr Fuji's offer? 2 what is the fixed cost, what is the variable cost per unit? 3 What other qualitative factors need to be considered in this decision?
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1 Current profit Proft after accepting the Fujis offer Nuber of unit 500 600 e... View the full answer
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Advertising and Promotion An Integrated Marketing Communications Perspective
ISBN: 978-0078028977
10th Edition
Authors: George Belch, Michael Belch
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