Ellis Enterprises produces high quality blankets sold to hotels and resorts. Blankets must be well made because of frequent washings. Currently, Holt sells 10,000 blankets at $60 each with the capacity to produce 12,000 blankets. Ellis is considering a special order from a hotel chain in Kenya for 1,000 blankets at a price of $45. Currently, Ellis has the following
costs:
If Ellis accepts the special order, they will incur an additional $2 per blanket in foreign currency transaction costs. No other product or facility costs will change.
Required:
1) Determine the impact of the special order on Ellis. Prepare your analysis in good form.
2) What other factors should Ellis consider in taking the special order?

Question

Ellis Enterprises produces high quality blankets sold to hotels and resorts. Blankets must be well made because of frequent washings. Currently, Holt sells 10,000 blankets at $60 each with the capacity to produce 12,000 blankets. Ellis is considering a special order from a hotel chain in Kenya for 1,000 blankets at a price of $45. Currently, Ellis has the following
  costs:
If Ellis accepts the special order, they will incur an additional $2 per blanket in foreign currency transaction costs. No other product or facility costs will change.
Required:
1) Determine the impact of the special order on Ellis. Prepare your analysis in good form.
2) What other factors should Ellis consider in taking the special order?

Quizplus · Accepted Answer

The Answer of Ellis Enterprises produces high quality blankets sold to hotels and resorts. Blankets must be well made because of frequent washings. Currently, Holt sells 10,000 blankets at $60 each with the capacity to produce 12,000 blankets. Ellis is considering a special order from a hotel chain in Kenya for 1,000 blankets at a price of $45. Currently, Ellis has the following
  costs:
If Ellis accepts the special order, they will incur an additional $2 per blanket in foreign currency transaction costs. No other product or facility costs will change.
Required:
1) Determine the impact of the special order on Ellis. Prepare your analysis in good form.
2) What other factors should Ellis consider in taking the special order?

Ellis Enterprises Produces High Quality Blankets Sold to Hotels and Resorts