Duygu Enterprise produces a single product. The business normally produces 8,000 products per year, but the annual
Question:
Duygu Enterprise produces a single product. The business normally produces 8,000 products per year, but the annual capacity of the business is 10,000 units. The annual activity information of the business is as follows:
Variable Costs (per item)
Direct Material 2.50 $
Direct Labor 3.00 $
Overall Production Cost 0,50 $
Sales and Marketing 1.50 $
Fixed Costs
General Production Cost 36.000 $
Sales and Marketing 16.000 $
The enterprise sells one of the products it produces domestically for 15 $. Duygu Enterprise has received an offer from a customer abroad. The customer enterprise offered to buy 2,000 products for 12 $. This offer will not affect the domestic sales and selling price of Duygu Enterprise.
If the business accepts this offer, it will also bear an additional fixed sales and marketing cost of 4.000 $. Should the Duygu enterprise accept this offer?
Finite Mathematics and Its Applications
ISBN: 978-0134768632
12th edition
Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair