Sweet Emily’s Candy Shop has received a special order for 1,200 brownies. The customer has offered a price of $6 per dozen. The unit cost of a brownie, at its normal sales level of 20,000 per year is...

Sweet Emily’s Candy Shop has received a special order for 1,200 brownies. The customer has offered a price of $6 per dozen. The unit cost of a brownie, at its normal sales level of 20,000 per year is variable production cost of $.33, fixed production costs of $.25, variable selling costs of $.10, and fixed selling costs of $.15. There is ample idle capacity to produce the special order without any change in unit costs except that variable selling costs would be reduced to $.05. How would accepting the special order affect Sweet Emily’s net operating income?

Dec 14, 2021
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