Question: PF ( Pty ) Ltd manufactures plastic storage boxes for which the normal monthly demand is 2 5 5 0 0 units. The storage boxes
PFPty Ltd manufactures plastic storage boxes for which the normal monthly demand is units. The storage boxes sell at R each. The factory currently operates at capacity therefore maximum capacity x units
The variable cost to manufacture one storage box is R Fixed costs amount to R per month. Fixed cost is recovered based on the normal demand.
PF Pty Ltd received a special order for units at a reduced selling price of R per storage box. If this order is accepted, it has to be delivered in full within the next month.
The normal demand for this product will not be affected if the special order is accepted.
Determine whether the special order should be accepted or not.
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