Newport Manufacturing makes and sells backyard fire pits. Each fire pit regularly sells for $269. The following cost data per unit are based on a full capacity of 3,000 fire pits produced each period.

Newport is negotiating a special order for the sale of 75 fire pits to an overseas customer who is located in a country that does not have civil liberties for its population. The only selling cost that would be incurred on the special order would be a $10 sales commission. Newport is expected to make 2,500 fire pits before the special order.

Required:

a. What is the minimum selling price Newport should negotiate for the special order?

b. What are three factors other than relevant costs that Newport should consider concerning this special order?

Question

Newport Manufacturing makes and sells backyard fire pits. Each fire pit regularly sells for $269. The following cost data per unit are based on a full capacity of 3,000 fire pits produced each period.

Newport is negotiating a special order for the sale of 75 fire pits to an overseas customer who is located in a country that does not have civil liberties for its population. The only selling cost that would be incurred on the special order would be a $10 sales commission. Newport is expected to make 2,500 fire pits before the special order.

Required:

a.	What is the minimum selling price Newport should negotiate for the special order?

b.	What are three factors other than relevant costs that Newport should consider concerning this special order?

Quizplus · Accepted Answer

The Answer of Newport Manufacturing makes and sells backyard fire pits. Each fire pit regularly sells for $269. The following cost data per unit are based on a full capacity of 3,000 fire pits produced each period.

Newport is negotiating a special order for the sale of 75 fire pits to an overseas customer who is located in a country that does not have civil liberties for its population. The only selling cost that would be incurred on the special order would be a $10 sales commission. Newport is expected to make 2,500 fire pits before the special order.

Required:

a.	What is the minimum selling price Newport should negotiate for the special order?

b.	What are three factors other than relevant costs that Newport should consider concerning this special order?

Newport Manufacturing Makes and Sells Backyard Fire Pits