Type your question hereLopez Company has been approached by a new customer to pr
ID: 2370733 • Letter: T
Question
Type your question hereLopez Company has been approached by a new customer to provide 2,000 units of its regular product at a special price of $6 per unit. The regular selling price of the product is $8 per unit. Lopez is operating at 75% of its capacity of 10,000 units. Identify whether the following costs are relevant to Lopez's decision as to whether to accept the order at the special selling price. No additional fixed manufacturing overhead will be incurred because of this order. The only additional selling expense on this order will be a $0.50 per unit shipping cost. There will be no additional administrative expenses because of this order.
Explanation / Answer
Yes, the following costs will be relevant. 1. No additional fixed manufacturing overhead will be incurred because of this order. 2. no additional administrative expenses because of this order. Yes, the order should be accepted.
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