Solution-What qualitative factors would Colin consider

What qualitative factors would Colin consider

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a) Viking Corporation's variable cost per unit produced is $100. Wholesaler Y offers to buy 2,000 additional units at $120 each. Wholesaler Z proposes to buy 1,500 additional units at $140 per unit. Viking has enough excess capacity to produce one but not both of the orders. Fixed costs are not affected by accepting either offer. Which offer should Viking accept and why?

b) Colin O'Shea has a carpentry shop that employs 4 carpenters. Colin received an order for 1,000 coffee tables. The coffee tables have a round tabletop and four decorative legs. An offer for $500 per table was received. Colin found an unfinished round tabletop that he could buy for $50 each. The quantitative cost data to make the tabletop is shown below:

Direct materials $10

Direct labor 35

Variable overhead 10

Fixed overhead 7

Required - What qualitative factors would Colin consider before he decides to buy the tabletop or make it?

Reference no: EM132997718

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What qualitative factors would Colin consider

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