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What additional profit or loss will they incur

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Question - Yazoo Manufacturing Company makes a product that sells for $42 a unit, incurring $28 per unit in variable costs and $10 per unit in fixed costs. A foreign wholesaler offers to buy 5,000 units for the special price of $25, substantially below its normal selling price. The special order will require additional shipping costs of $1 per unit.

a. Should Yazoo accept the order, assuming that it has no effect on the higher price normally received in the local market?

b. What additional profit or (loss) will they incur by accepting the offer?

Reference no: EM133090140

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