Bianca Jewel Box Manufacturing received an offer from a nonprofit organization for a one-time purchase of 2,000 of its Model RYA18261 at $20 each for distribution to flood victims in the South. Full capacity at Bianca is 25,000 units. Bianca currently expects to make 20,000 units in the current year and based all estimates on that expectation. There will be no delivery costs for this special order. The average costs to Bianca to produce one Model RYA18261 are $27 each as shown. $\begin{array}{lr}
\text { Variable manufacturing costs } & \$ 11 \
\text { Fixed manufacturing costs } & 7 \
\text { Variable Selling \& Administrative costs } & 6 \
\text { Fixed Selling and Administrative costs } & \underline{3} \
\quad \text { Total } &\underline{ \$ 27}
\end{array}$
Should Bianca accept this special offer? Explain your decision.

Question

Bianca Jewel Box Manufacturing received an offer from a nonprofit organization for a one-time purchase of 2,000 of its Model RYA18261 at $20 each for distribution to flood victims in the South. Full capacity at Bianca is 25,000 units. Bianca currently expects to make 20,000 units in the current year and based all estimates on that expectation. There will be no delivery costs for this special order. The average costs to Bianca to produce one Model RYA18261 are $27 each as shown. $\begin{array}{lr}
\text { Variable manufacturing costs } & \$ 11 \
\text { Fixed manufacturing costs } & 7 \
\text { Variable Selling \& Administrative costs } & 6 \
\text { Fixed Selling and Administrative costs } & \underline{3} \
\quad \text { Total } &\underline{ \$ 27}
\end{array}$
 Should Bianca accept this special offer? Explain your decision.

Quizplus · Accepted Answer

The Answer of Bianca Jewel Box Manufacturing received an offer from a nonprofit organization for a one-time purchase of 2,000 of its Model RYA18261 at $20 each for distribution to flood victims in the South. Full capacity at Bianca is 25,000 units. Bianca currently expects to make 20,000 units in the current year and based all estimates on that expectation. There will be no delivery costs for this special order. The average costs to Bianca to produce one Model RYA18261 are $27 each as shown. $\begin{array}{lr}
\text { Variable manufacturing costs } & \$ 11 \
\text { Fixed manufacturing costs } & 7 \
\text { Variable Selling \& Administrative costs } & 6 \
\text { Fixed Selling and Administrative costs } & \underline{3} \
\quad \text { Total } &\underline{ \$ 27}
\end{array}$
 Should Bianca accept this special offer? Explain your decision.

Bianca Jewel Box Manufacturing Received an Offer from a Nonprofit