Micro Enterprises has the capacity to produce 10,000 widgets a month,and currently makes and sells 9,000 widgets a month.Widgets normally sell for $6 each,and cost an average of $5 to make,including fixed costs.The monthly fixed costs are $18,000.Coyote Corp.has offered to buy 1,000 widgets at $4 each. What other factors should be taken into consideration? A)The impact on the normal selling price of $6 B)Will an additional shift be needed to complete the order? C)Are future orders from Coyote likely? D)Does the special price comply with the Robinson-Patman Act? E)All of the above

Question

Quizplus · Accepted Answer

All of the options listed should be taken into consideration. The impact on the normal selling price should be evaluated to ensure that selling to Coyote Corp. at a lower price does not negatively affect the overall profitability of the company. The need for an additional shift should be examined to determine if it is necessary to meet the increased demand from Coyote Corp. The likelihood of future orders from Coyote Corp. should also be considered to determine if selling at a lower price is worth the potential long-term benefits. Finally, it is important to ensure that the special price offered by Coyote Corp. complies with the Robinson-Patman Act, which prohibits price discrimination between different buyers.

Micro Enterprises Has the Capacity to Produce 10,000 Widgets