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Should Knorr accept the order

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Question - Knorr's Knob Company produces 5,000 doorknobs a month, which is 90% of factory capacity. Variable manufacturing costs are $4 per unit. Fixed manufacturing costs are $10,000 per month. Knobs are usually sold for $20 apiece. Ms. Knorr has just received a special order from Uganda Home Supplies to produce an extra 500 knobs for $2,200. Should Knorr accept the order? Discuss all important assumptions/criteria which must be considered in a decision like this (make a fully developed argument/recommendation).

Reference no: EM132696362

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