EasyFlow is a manufacturer of ball point pens.The pens wholesale for $15 per dozen.EasyFlow has been approached by a major franchise with a special order for 75,000 dozen pens for a special promotional campaign at $10 per dozen.In addition to the usual logo printed on the pen the customer wants a special emblem attached.The emblem will cost EasyFlow $0.25 per dozen.Specialized equipment to attach the emblem will be needed.The equipment cost is $8,000 and is expected to have no use after this order.EasyFlow's total cost of production is $11 per dozen pens,as follows:

Prepare an incremental analysis to determine whether EasyFlow should accept the special sales order assuming fixed costs would not be affected by the special order.

Question

EasyFlow is a manufacturer of ball point pens.The pens wholesale for $15 per dozen.EasyFlow has been approached by a major franchise with a special order for 75,000 dozen pens for a special promotional campaign at $10 per dozen.In addition to the usual logo printed on the pen the customer wants a special emblem attached.The emblem will cost EasyFlow $0.25 per dozen.Specialized equipment to attach the emblem will be needed.The equipment cost is $8,000 and is expected to have no use after this order.EasyFlow's total cost of production is $11 per dozen pens,as follows:
  
Prepare an incremental analysis to determine whether EasyFlow should accept the special sales order assuming fixed costs would not be affected by the special order.

Quizplus · Accepted Answer

The Answer of EasyFlow is a manufacturer of ball point pens.The pens wholesale for $15 per dozen.EasyFlow has been approached by a major franchise with a special order for 75,000 dozen pens for a special promotional campaign at $10 per dozen.In addition to the usual logo printed on the pen the customer wants a special emblem attached.The emblem will cost EasyFlow $0.25 per dozen.Specialized equipment to attach the emblem will be needed.The equipment cost is $8,000 and is expected to have no use after this order.EasyFlow's total cost of production is $11 per dozen pens,as follows:
  
Prepare an incremental analysis to determine whether EasyFlow should accept the special sales order assuming fixed costs would not be affected by the special order.

EasyFlow Is a Manufacturer of Ball Point Pens