Special Order Poppy has received a special order for 1,000 units of its product at a...

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Special Order Poppy has received a special order for 1,000 units of its product at a special price of $125. The product currently sells 18,000 units for $150 and has the following manufacturing costs: Per unit Direct materials $ 45 Direct labor 30 Variable manufacturing overhead 35 Fixed manufacturing overhead 25 Unit cost $ 135 Assume that Poppy has sufficient capacity to fill the order without harming normal production and sales. a. If Poppy accepts the order, what effect will the order have on the company's short-term profit? (Increase by $15,000) b. What minimum price should Poppy be willing to accept a special order? ($110) Special Order Poppy has received a special order for 1,000 units of its product at a special price of $125. The product currently sells 18,000 units for $150 and has the following manufacturing costs: Per unit Direct materials $ 45 Direct labor 30 Variable manufacturing overhead 35 Fixed manufacturing overhead 25 Unit cost $ 135 Assume that Poppy has sufficient capacity to fill the order without harming normal production and sales. a. If Poppy accepts the order, what effect will the order have on the company's short-term profit? (Increase by $15,000) b. What minimum price should Poppy be willing to accept a special order? ($110)

Answer rating: 100% (QA)

a Per unit Total 1000 units Incremental revenue 125 125000 Incremental cos... View the full answer