Reference no: EM131160429
Louisville Corporation produces baseball bats for kids that it sells for $32 each. At capacity, the company can produce 50,000 bats a year. The costs of producing and selling 50,000 bats are as follows:
Cost per Bat Total Costs Direct materials $12 s 600,000
direct manufacturing labor 3 150,000
Variable manufacturing overhead 1 50,000
Fixed manufacturing overhead 5 250,000
Variable selling expenses 2 100,000
Fixed selling expenses 4 200,000
Total costs $27 1350000
Required . Suppose Louisville is currently producing and selling 40,000 bats. At this level of production and sales, its fixed costs are the same as given in the preceding table. Ripkin Corporation wants to place a onetime special order for 10,000 bats at $25 each. Louisville will incur no variable selling costs for this special order. Should Louisville accept this one-time special order? Show your calculations.