Kringle Company produces holiday ornaments that it sells to its regular customers for $12 per unit. The cost to produce each unit is $9, of which $6 is variable per unit and $3 is fixed per unit. A local charity has asked Kringle Company to produce 1,000 ornaments for its annual charity fund raising event as a gift for each donation. The charity is asking for a special pricing offer at $8 per unit instead of the normal $12 per unit. The ornaments will not require any customization, and Kringle Company currently has sufficient excess operating capacity to manufacture the 1,000 special order ornaments. Should Kringle Company accept the special-order proposal from the local charity. (Show all computations to support your decision.)

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The Answer of Kringle Company produces holiday ornaments that it sells to its regular customers for $12 per unit. The cost to produce each unit is $9, of which $6 is variable per unit and $3 is fixed per unit. A local charity has asked Kringle Company to produce 1,000 ornaments for its annual charity fund raising event as a gift for each donation. The charity is asking for a special pricing offer at $8 per unit instead of the normal $12 per unit. The ornaments will not require any customization, and Kringle Company currently has sufficient excess operating capacity to manufacture the 1,000 special order ornaments. Should Kringle Company accept the special-order proposal from the local charity. (Show all computations to support your decision.)

Kringle Company Produces Holiday Ornaments That It Sells to Its