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Bronson Ltd produces financial calculators. The production capacity is 35,000 calculators, and the company is currently...

Bronson Ltd produces financial calculators. The production capacity is 35,000 calculators, and the company is currently operating at 80% capacity. Variable manufacturing costs are $12 per unit. Fixed manufacturing costs are $420,000. The calculators are normally sold to Computek Ltd at $28 each. Bronson has a special order offer from Office Equipment Ltd (a foreign wholesaler) to purchase an additional 6,000 calculators at $14 per unit. The delivery costs for this order would be $13,000. Should this offer be accepted? Why?

a.

Yes, because it would increase profits by $1,000
b.

No, because the price to Office Equipment Ltd is $6 lower than the full cost of each unit produced
c.

Yes, because it would increase profits by $71,000
d.

No, because it would decrease profits by $1,000
e.

No, because the selling price to Office Equipment Ltd would be $14 less than the current selling price

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ekkarill92 answered 2 years ago
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