Question: At Jaymes Company, it costs $30 per unit ($20 variable and $10 fixed) to make a product at full capacity that normally sells for $45.

  1. At Jaymes Company, it costs $30 per unit ($20 variable and $10 fixed) to make a product at full capacity that normally sells for $45. A foreign wholesaler offers to buy 3000 units of this product at $25 each. Jaymes will incur special shipping costs of $2 per unit if they accept this offer. Assuming Jaymes has excess operating capacity, using the framework provided below indicate the net income or loss Jaymes would realize by accepting the special order. Should Jaymes accept or reject the special order?

Reject

Order

Accept

Order

Net Income

Increase

(Decrease)

Revenues

CostsVariable manufacturing

Shipping

Net income

Should Jaymes accept this special order? _______________________________________________________

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