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Author Question: Kitchens Sales Inc. is approached by Mr. Louis Cifer, a new customer, to fulfill a large ... (Read 78 times)

bclement10

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Kitchens Sales Inc. is approached by Mr. Louis Cifer, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. The following per unit data apply for sales to regular customers:

Direct materials$554
Direct labor364
Variable manufacturing support56
Fixed manufacturing support120
Total manufacturing costs1,094
Markup (50%)547
Targeted selling price$1,641

Kitchens Sales inc. has excess capacity. Mr. Cifer wants the cabinets in cherry rather than oak, so direct material costs will increase by $66 per unit. The average marketing cost of Kitchens Sales product is $173 per order.  Other than price, what other items should Kitchens Sales consider before accepting this one-time-only special order?
◦ reaction of shareholders
◦ reaction of existing customers to the lower price offered to Mr. Louis Cifer
◦ demand for cherry cabinets
◦ price is the only consideration


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Marked as best answer by bclement10 on Mar 6, 2021

Madisongo23

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bclement10

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Reply 2 on: Mar 6, 2021
Gracias!


xiazhe

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Reply 3 on: Yesterday
Excellent

 

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