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What other considerations should be included in accepting

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Reference no: EM132581338

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 16,000. 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 $6/unit for the special order.

Required

Question 1: What is the minimum selling price they should accept for this special order?

Question 2: Besides costs, briefly describe what other considerations should be included in accepting or rejecting this special order.

Reference no: EM132581338

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