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Cost per Unit

Variable manufacturing costs

$29

Fixed manufacturing costs

$10

Variable selling costs

$8

Fixed selling costs

$12

Capacity cannot be added in the short run and the firm currently sells the product for $65 per unit.

The company is currently producing 180,000 units per month. A potential customer has contacted the firm and offered to purchase 20,000 units this month only. The customer is willing to pay $53 per unit. Since the potential customer approached the firm, there will be no variable selling costs incurred. Should the company accept the special order? Why or why not?

Accounting Basics, Accounting

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  • Reference No.:- M92563378
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