Florida Enterprises produces high quality blankets sold to hotels and resorts. Blankets must be well made because of frequent washings. Currently, Florida sells 10,000 blankets at $60 each with the capacity to produce 12,000 blankets. Florida is considering a special order from a hotel chain in Mexico for 1,000 blankets at a price of $45. Currently, Florida has the following costs:
$\begin{array}{ll}
\text { Unit Costs } & \$ 250,000 \
\text { Product Level Costs } & \$ 40,000 \
\text { Facility Costs } & \$ 125,00
\end{array}$

If Florida accepts the special order, it will incur an additional $2 per blanket in foreign currency transaction costs. No other product or facility costs will change.
Required:
a. Determine the impact of the special order on Florida. Prepare your analysis in good form.
b. What other factors should Florida consider in taking the special order?

Question

Florida Enterprises produces high quality blankets sold to hotels and resorts. Blankets must be well made because of frequent washings. Currently, Florida sells 10,000 blankets at $60 each with the capacity to produce 12,000 blankets. Florida is considering a special order from a hotel chain in Mexico for 1,000 blankets at a price of $45. Currently, Florida has the following costs:
 $\begin{array}{ll}
\text { Unit Costs } & \$ 250,000 \
\text { Product Level Costs } & \$ 40,000 \
\text { Facility Costs } & \$ 125,00
\end{array}$
 
If Florida accepts the special order, it will incur an additional $2 per blanket in foreign currency transaction costs. No other product or facility costs will change.
Required:
a. Determine the impact of the special order on Florida. Prepare your analysis in good form.
b. What other factors should Florida consider in taking the special order?

Quizplus · Accepted Answer

The Answer of Florida Enterprises produces high quality blankets sold to hotels and resorts. Blankets must be well made because of frequent washings. Currently, Florida sells 10,000 blankets at $60 each with the capacity to produce 12,000 blankets. Florida is considering a special order from a hotel chain in Mexico for 1,000 blankets at a price of $45. Currently, Florida has the following costs:
 $\begin{array}{ll}
\text { Unit Costs } & \$ 250,000 \
\text { Product Level Costs } & \$ 40,000 \
\text { Facility Costs } & \$ 125,00
\end{array}$
 
If Florida accepts the special order, it will incur an additional $2 per blanket in foreign currency transaction costs. No other product or facility costs will change.
Required:
a. Determine the impact of the special order on Florida. Prepare your analysis in good form.
b. What other factors should Florida consider in taking the special order?

Florida Enterprises Produces High Quality Blankets Sold to Hotels and Resorts