Holiday Decorations Unique has been approached by the community college to make

Question

Holiday Decorations Unique has been approached by the community college to make special decorations for the faculty and staff. The college is willing to buy 5,000 Christmas ornaments with their own design for $6 a piece. The company normally sells its decorations for $12.00 each. A break down of their costs is as follows: Direct Materials $2.00 Direct Labor .50 Variable Costs .50 Fixed Costs 1.50 Total Cost Per Unit $4.50 Should Holiday Decorations Unique accept the special order made by the college? The company has enough excess capacity to make this order.

Explanation / Answer

As per relevant cost comes to 2+.5+.5 = 3 per unit, hence the order should be accepted. Please consider the time devoted to make this reply by rating this as 5star. Thank u in advance. God bless u :)

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.