The following data relate to M4 Engineering: Anticipated sales...... Normal sales price/unit.…............ Variable manufacturing cost/unit..... $10 Variable selling cost/unit............ Fixed manufacturing cost.......... ($8.00/unit) 100,000 units $32 $5 $800,000 $200,000 ($2.00/unit) Fixed selling cost .…..... Total cost/unit (full absorption)......... $25.00 M4 Engineering has the opportunity to take a one-time special order from a customer who wants to buy 20,000 units, but is only willing to pay $18.00 per unit. The special order will not affect M4's anticipated sales to other customers or the company's fixed costs. Should M4 Engineering accept the special order? Why or why not? Show your calculations.

The following data relate to M4 Engineering: Anticipated sales...... Normal sales price/unit.…............ Variable manufacturing cost/unit..... $10 Variable selling cost/unit............ Fixed manufacturing cost.......... ($8.00/unit) 100,000 units $32 $5 $800,000 $200,000 ($2.00/unit) Fixed selling cost .…..... Total cost/unit (full absorption)......... $25.00 M4 Engineering has the opportunity to take a one-time special order from a customer who wants to buy 20,000 units, but is only willing to pay $18.00 per unit. The special order will not affect M4's anticipated sales to other customers or the company's fixed costs. Should M4 Engineering accept the special order? Why or why not? Show your calculations.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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