Determine whether or not the special order to accepted

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Question - Brown Ltd. Produces and sells a part used in the production of HD television .The unit costs associated with this part are as follows

Direct materials $0.25

Direct labor 0.20

Variable manufacturing overhead 0.25

Fixed manufacturing overhead 0.20

Total cost $0.90

Pink Co. Has approached brown Ltd. with an offer to purchase 30,000 units of this part at a price of $0.78. Accepting this special sales order will put die manufacturing capacity to use and will not affect regular sales. Total fixed costs will not change.

Determine whether or not the special order to accepted. Justify your conclusion. Include 2 qualitative factors that management should consider related to accepting a special order.

Reference no: EM133122627

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