• Question: Bearing and Seal Ltd manufactures bearings and seals for both the automotive as wellas industrial sectors. The company operates in two divisions, the rubber division andthe steel division. Their bearings and seals are used in all makes of motor vehicles, aswell as in industrial equipment and machinery, both locally and internationally. Thebearings are

  Bearing and Seal Ltd manufactures bearings and seals for both the automotive as wellas industrial sectors$.$ The company operates in two divisions, the rubber division andthe steel division. Their bearings and seals are used in all makes of motor vehicles, aswell as in industrial equipment and machinery, both locally and internationally. Thebearings are manufactured in the steel division, while the seals are manufactured inthe rubber division. The cost to produce a bearing is Rs$4\mathrm{.}44$ and the cost to produce aseal is Rs$2.$ They are currently producing $60000$ seals and $27000$ bearings for themonth, which represent $75\%$ capacity. The total costs for the steel division are Rs$120,$$000$ of which $70\%$ are variable costs.They have received an order from Part$’$s auto manufacturers to supply $8000$ bearingsfor a vintage model Super at a price of Rs$8$ per bearing.Required:Based on the above information, should Bearing and Seal Ltd accept the special order?

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Answer To determine whether Bearing and Seal Ltd should accept the special order from Parts auto man... View the full answer