Reference no: EM132894648

Question - Gorski Corporation manufactures parts that are used in the production of washers and dryers. The following costs are associated with part no. 65:

The company can sell the part at the market at $120 per unit. Recently, the company received a special-order inquiry from an appliance manufacturer in Spain for 15,000 units of part no. 65. at a price of $105 per unit. If the company accepted the order only $3 of fixed manufacturing will be incurred on the order, and the variable selling costs per unit will amount to only $5. Gorski has available capacity, and the president is in favour of accepting the order, however, the plant manager is opposed.

1) Should Gorski accept the offer:

2) The minimum price that Gorski should charge the Spanish manufacturer.

3) By how much the change in net income if the special order is accepted or rejected?