Florida Enterprises produces high quality blankets sold to hotels and resorts.Blankets must be well made because of frequent washings.Currently,Florida sells 10,000 blankets at $60 each with the capacity to produce 12,000 blankets.Florida is considering a special order from a hotel chain in Mexico for 1,000 blankets at a price of $45.Currently,Florida has the following costs:
If Florida accepts the special order,it 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 Florida.Prepare your analysis in good form.
2. )What other factors should Florida consider in taking the special order?
Correct Answer:
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