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What other factors should consider in deciding to accept

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Pembroke Furniture manufactures rustic furniture. The cost accounting system estimates manufacturing costs to be $80 per table, consisting of 70% variable costs and 30% fixed costs, based on a current production level of 15,000. Total capacity is 20,000. The current selling price is $100 per unit.

The company just received a special order for 2,000 tables. This special order will be delivered to the customer as a single delivery, and will require extra shipping and storage costs of $50,000. As well, packaging costs will be reduced by $3/unit for the special order.

Required:

Problem A. What is the minimum selling price they should accept for this special order?

Problem B. Besides cost, what other factors should they consider in deciding to accept or reject this special order?

Reference no: EM132718316

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