Determine the contribution to profit from the special order

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Reference no: EM131971914

Problem

Rooney Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Rooney's normal sales territory, asks Rooney to pour 47 slabs for Lancing's new development for homes. Rooney has teh capacity to build 300 slabs and is presently working on 120 of them. Lancing is willing to pay only $2,510 per slab. Rooney estimates the cost of a typical job to include unit-level materials, $830; unit-level labor, $530; and an allocated portion of facility-level overhead, $1,220.

Calculate the contribution to profit from the special order. Should Rooney accept or reject the special order to pour 47 slabs for $2,510 each?

Reference no: EM131971914

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