Crop Monitor, Corp. typically manufactures 1,200,000 moisture gauges per year. Variable costs were $21,000,000 and fixed cost were $1,800,000. Management predicts 1,300,000 gauges will be sold at $50.00 each in the upcoming year. However, the company received special order to produce 300,000 gauges to be sold at a 25% discount off the regular price. The company has the capacity to produce the extra gauges and fixed costs would not increase due to the special order.

Required: Should Crop Monitor Corp accept the order? If they do, what will be the change in income?

  

Answer rating: 100% (QA)

To determine whether Crop Monitor Corp should accept the special order and the change in income lets ... View the full answer