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

Li Company produces a product that sells for $$106$ per unit. The product cost per unit using absorption costing is $$70.$ A customer contacts Li and offers to purchase $4,200$ units of this product for $$90$ per unit. Variable costs of goods sold with this order would be $$41$ per unit, and variable selling and administrative costs would be $$29$ 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.

$($a$)$ 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 A

Required B

Compute contribution margin for this special order.

Special Order Analysis

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