Question: We have received three special order requests from different organizations. We can only pick one request. Since each organization will accept the blankets without typical
We have received three special order requests from different organizations. We can only pick one request. Since each organization will accept the blankets without typical packaging, we can save $1.50 in variable overhead per unit by choosing any of the special orders. Request #1: Danson Shelters, a non-profit organization that provides services to homeless shelters, is proposing to purchase 9,000 blankets for $27 per unit. Request #2: Holiday Happiness, a for-profit organization that sells markdown holiday inventory to thrift stores, is proposing to purchase 13,500 blankets for $30 per unit. Request #3: Kids and Camping, a non-profit organization that provides support for youth camps, is proposing to purchase 11,500 blankets for $28 per unit. Attached is our current product details and capacity. Please provide your recommended special-order choice and any nonfinancial or other considerations that could affect the choice. Our company has a 50,000-unit capacity during the year. We do not have any overtime capabilities, so all units beyond capacity represent lost regular sales. Current committed capacity 43,000 units Regular sales price per unit $33 Direct labor per unit $8 Direct materials per unit $15 Variable overhead per unit $6 Fixed overhead total $47,300
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