"Altech Cases Inc., a reputable manufacturer of high-quality protective cases for cellular phones, is faced with a strategic decision regarding a special order opportunity. The company, known for its durable and stylish cases, has just received a request to produce 490 units of a modified case tailored for a specific phone model. Currently, Altech produces regular cases, priced at $59 per unit, with a unit cost breakdown of $38, consisting of $29 in total variable costs and $9 allocated fixed manufacturing overhead common to the company's operations.

Now, considering the special order, Altech must evaluate the additional costs associated with producing the modified cases. These extra costs include $2 per unit for extra paint and plastic required for the modification, as well as a one-time adjustment cost of $2,401 to adapt the design of the cases. The selling price for the modified cases is $61 per unit.

However, it's important to note that Altech Cases is currently operating at full capacity. For each modified case produced and sold, the production and sale of a regular case must be foregone. This necessitates a careful analysis of the opportunity cost involved in accepting the special order.

Given this context, should Altech Cases Inc. accept the order for the modified cases? To make an informed decision, calculate the foregone contribution margin per unit, variable cost per unit, fixed cost per unit, and total relevant costs. Round the Fixed Cost per Unit and Total Relevant Cost to 2 decimal places.

Foregone Contribution Margin per Unit: $Answer Variable Cost per Unit: $Answer Fixed Cost per Unit: $Answer Total Relevant Costs: $Answer

Based on the analysis, indicate whether the company should accept or reject the special order, taking into consideration the potential impact on profitability and capacity utilization."

Answer rating: 100% (QA)

lets work through this stepbystep Given information Regular case price 59 per unit Regular case vari... View the full answer