DataSave is a manufacturer of USB Flash Drives. Their 16GB model wholesales for $32. DataSave has been approached by a major sports franchise with a special order for 25,000 16GB flash drives in their team colours with a special team emblem attached at a price of $18 each. The special colouring will not add any new costs, however, the emblem will be purchased at a cost of $0.40 each and new equipment will be required at a cost of $12,000. The new equipment is not expected to be of use for any future orders. DataSave's current total cost of production for this model is $22 per USB, as follows:

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

Question

DataSave is a manufacturer of USB Flash Drives. Their 16GB model wholesales for $32. DataSave has been approached by a major sports franchise with a special order for 25,000 16GB flash drives in their team colours with a special team emblem attached at a price of $18 each. The special colouring will not add any new costs, however, the emblem will be purchased at a cost of $0.40 each and new equipment will be required at a cost of $12,000. The new equipment is not expected to be of use for any future orders. DataSave's current total cost of production for this model is $22 per USB, as follows:
 
 Prepare an incremental analysis to determine whether DataSave should accept the special sales order assuming fixed costs would not be affected by the special order.

Quizplus · Accepted Answer

The Answer of DataSave is a manufacturer of USB Flash Drives. Their 16GB model wholesales for $32. DataSave has been approached by a major sports franchise with a special order for 25,000 16GB flash drives in their team colours with a special team emblem attached at a price of $18 each. The special colouring will not add any new costs, however, the emblem will be purchased at a cost of $0.40 each and new equipment will be required at a cost of $12,000. The new equipment is not expected to be of use for any future orders. DataSave's current total cost of production for this model is $22 per USB, as follows:
 
 Prepare an incremental analysis to determine whether DataSave should accept the special sales order assuming fixed costs would not be affected by the special order.

DataSave Is a Manufacturer of USB Flash Drives