Which of the costs are relevant in the decision as to whether the new machine should be acquired?
The fixed manufacturing costs will remain unchanged if the order is accepted or not. The foreign purchaser is willing to pay $22 for each unit and would like to purchase 5,000 units. Because the sales would not go through regular distribution channels, the variable marketing costs would not be incurred. However, a packing and shipping cost of $1.00 per unit would be incurred to get the units ready for overseas shipping. What is the relevant cost per unit that Julia's Garden Supply should use when considering whether or not to accept the special order?
The fixed manufacturing costs will remain unchanged if the order is accepted or not. The foreign purchaser is willing to pay $22 for each unit and would like to purchase 5,000 units. Because the sales would not go through regular distribution channels, the variable marketing costs would not be incurred. However, a packing and shipping cost of $1.00 per unit would be incurred to get the units ready for overseas shipping. What is the potential profit or loss that Julia's Garden Supply will make if it accepts the special order?
During the next period POP will only be able to obtain 5,000 units of material A. In what order should POP produce the products next period to maximize profit?
All variable costs and fixed manufacturing costs totaling $45,000 can be eliminated if the product is purchased. The remaining costs will not change even if Ver is purchased. There is no other use for the space that Ver currently occupies. What is the net advantage or disadvantage to the firm if Ver is purchased from the outside vendor?
