Calculate the opportunity cost of accepting special order

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Reference no: EM132157374

Answer the following Questions :

Is Diane's general approach to calculating the opportunity cost in terms of the physical units involved correct? Explain.

Assuming productive capacity cannot be increased for either machine in December, how many PVRs would TBD have to forgo selling to existing customers to fill the special order from Fitch Limited?

Calculate the opportunity cost of accepting the special order.

Calculate the net effect on profits of accepting the special order.

Now assume that TBD is operating at 75% of capacity in December. What is the minimum price TBD should be willing to accept on the special order?

What are some qualitative issues that should be considered when accepting special orders such as that proposed by Fitch Limited?

Attachment:- Case Analysis.rar

Reference no: EM132157374

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