Fanning Concrete Company pours concrete slabs for single-family homes. The Lancing Construction Company, which operates outside of
Question:
Fanning Concrete Company pours concrete slabs for single-family homes. The Lancing Construction Company, which operates outside of Fanning's normal sales territory, asks Fanning to pour 55 slabs for the new Lancing housing development. Fanning has the capacity to build 320 slabs and is currently working on 110 of them. Lancing is willing to pay only $2,630 per tile. Fanning estimates that the cost of a typical job includes unit-level materials, $950; unit-level labor, $410; and an allocated share of overhead at the facility level, $1,320.
Required
Calculate the contribution to the benefit of the special order. Should Fanning accept or reject the special request to pour 55 slabs at $2630 each?
Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Olds