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Question - Elimisha is a non-profit organization that sells paint (by the 10-gallon container) to kampala area non-profit organizations that are rehabilitating apartment buildings. They sell the paint for $50 per 10-gallon container.
The company has just received a special order from a large non-profit rehab. organization. The order is for 800 ten-gallon containers of a custom mix paint at a price of $9.00 per gallon. If elimisha accepts the offer, it will not affect normal business operations. Further, fixed costs will be increased by $4,000 if the order is accepted but normal variable costs for the order of $32 per 10-gallon container will be 5% lower than usual because some variable costs will be avoided.
if they accept the order? Should elimisha accept the offer?
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