A new customer has surfaced. That customer has asked you to consider producing a

Question

A new customer has surfaced.  That customer has asked you to consider producing a special one-time order for them.  This special order would require a modification to the recipe that will slightly increase the variable cost per unit.  Furthermore, there would be a small fixed cost addition.  The details for the order as follows:

Conduct a differential analysis regarding this special order.  Would you accept this order under the conditions provided?  Explain and defend your position.

Explanation / Answer

60,000*(1.4)-60000*0.04-5500=$76100

So Profit is greater than zero so Will take the project.

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