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Ray Ban is one of the most recognisable sunglasses brands. The following presents hypothetical information in regards to the receipt of a special order by this firm. Ray Ban currently has capacity to produce 120,000 units per month which it sells for $170 per unit.
The typical cost to manufacture each pair of sunglasses is provided below:
Direct materials $40.00
Direct labour $20.00
Variable overhead $15.00
Fixed overhead $10.00
Required:
Question 1. Evaluate whether this order is acceptable on financial grounds. Ensure that your answer is discussed and supported by relevant calculations/workings
Question 2. Identify and discuss at least three relevant qualitative factors that should be considered in the evaluation of this special order
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