The management of Garland Inc. is considering whether or not to accept a special sales order for 500
Units of a product that it manufactures. Management has been provided the following data regarding
The manufacturing and selling costs per unit:
Management has been informed that variable selling costs pertaining to the special order will be
Reduced by 20%. Management has also been informed that 250 units of sales to regular customers will
Be lost; the sales to regular customers create a contribution margin of $500 per unit. What is the
Lowest selling price that Garland's management would be willing to accept?

Question

The management of Garland Inc. is considering whether or not to accept a special sales order for 500
Units of a product that it manufactures. Management has been provided the following data regarding
The manufacturing and selling costs per unit:
 Management has been informed that variable selling costs pertaining to the special order will be
Reduced by 20%. Management has also been informed that 250 units of sales to regular customers will
Be lost; the sales to regular customers create a contribution margin of $500 per unit. What is the
Lowest selling price that Garland's management would be willing to accept?

Quizplus · Accepted Answer

The Answer of The management of Garland Inc. is considering whether or not to accept a special sales order for 500
Units of a product that it manufactures. Management has been provided the following data regarding
The manufacturing and selling costs per unit:
 Management has been informed that variable selling costs pertaining to the special order will be
Reduced by 20%. Management has also been informed that 250 units of sales to regular customers will
Be lost; the sales to regular customers create a contribution margin of $500 per unit. What is the
Lowest selling price that Garland's management would be willing to accept?

The Management of Garland Inc