Parker plumbing has received a special one-time order for

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Reference no: EM13575622

Parker Plumbing has received a special one-time order for 1,500 faucets (units) at $5 per unit. Parker currently produces and sells 7,500 units at $6.00 each. This level represents 75% of its capacity. Production costs for these units are $4.50 per unit, which includes $3 variable cost and $1.50 fixed cost. To produce the special order, a new machine needs to be purchased at a cost of $1,000 with a zero salvage value. Management expects no other changes in costs as a result of the additional production.

If Parker wishes to earn $1,250 on the special order, the size of the order would need to be:

4,500 units. 2,250 units. 1,125 units. 625 units. 300 units.

Reference no: EM13575622

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