QS $19-21($Algo$)$ Analyze special order LO P$3$

LI Company produces a product that sells for $$120$ per unit. The product cost per unit using absorption costing is $$70.$ A

customer contacts LI and offers to purchase $5,600$ units of this product for $$104$ per unit. Varlable costs of goods sold with this

order would be $$48$ per unit, and varlable selling and administrative costs would be $$36$ per unit. This special order would not

require any additional fixed costs, and LI has sufficient capacity to produce this special order without affecting regular sales.

$($d$)$ Compute contribution margin for this special order.

$($b$)$ Should LI accept this special order?

Complete this question by entering your answers in the tabs below.

Required $B$

Compute contribution margin for this special order.

Special Order Analysis