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Welch Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Welch Manufacturing has enough excess capacity to fill the order without affect other sales.
The following per unit data apply for sales to regular customers:
Variable costs Direct materials 41 Direct labor 19 Manufacturing support 38 Packaging costs 12
Fixed costs Manufacturing support 45 Packaging costs 15 Problem 1: What is the minimum sales price that Welch should be willing to accept the order? In other words, at what sales price is Welch indifferent between accepting the order and rejecting the order?
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