Miss Candy tells you of a discussion she had recently with Professor Hamper where she repeated the need to produce up to the company’s maximum capacity of 70,000 doses. Miss Candy mentioned that there is a potential request for an extra 5,000 dose with the selling price of $330. Professor Hamper immediately rejected the order as the company would make a loss on that order. However, she would be prepared to sell the dose on a cost basis for $340 each, provided the order was increased to 15,000 doses.

Additional information:

Usual selling price $340

Variable cost     $211

Fixed cost           $8,450,000.00

Provide Miss Candy the following information:

(a) Computation of the change in profits from accepting the order for 5,000 doses at $330.

(b) Computation of the change in profits from accepting an order for 15,000 doses at $340.

(c) Indicate, with justification which proposal, if either, should be accepted.

(d) Identification of 2 non-financial factors that should be considered before a final decision is made.