Packer Corporation makes vases, the costs of which are: The manufacturing overhead can be divided into 60% variable manufacturing overhead and 40% fixed manufacturing overhead. A major department store has offered to buy 1,000 of the vases from Packer for $250 each. Given this information, if Packer has sufficient idle capacity and no adverse qualitative factors, should Packer accept the special order?

Question

Packer Corporation makes vases, the costs of which are:  The manufacturing overhead can be divided into 60% variable manufacturing overhead and 40% fixed manufacturing overhead. A major department store has offered to buy 1,000 of the vases from Packer for $250 each. Given this information, if Packer has sufficient idle capacity and no adverse qualitative factors, should Packer accept the special order?

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The Answer of Packer Corporation makes vases, the costs of which are:  The manufacturing overhead can be divided into 60% variable manufacturing overhead and 40% fixed manufacturing overhead. A major department store has offered to buy 1,000 of the vases from Packer for $250 each. Given this information, if Packer has sufficient idle capacity and no adverse qualitative factors, should Packer accept the special order?

Packer Corporation Makes Vases, the Costs of Which Are