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Buoy manufactures flotation vests. Its financial information for the past month is as follows: Unit sales: 31,000 units Total sales revenues:
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Buoy manufactures flotation vests. Its financial information for the past month is as follows:
Unit sales: 31,000 units
Total sales revenues: $434,000
Total variable costs: $200,000
Total fixed costs: $216,000
Divers Inc. wants to buy 5,000 vest from Buoy. Acceptance of the order will not increase any of Buoy's fixed costs. Its variable cost per unit will also remain the same. There is enough unused capacity to manufacture the additional vests. Divers has offered $10 per vest.
a) giv an analysis to determine whether Buoy should accept or decline this special sales order.ee
b) Explain why you would accept or reject the order.
c) Identify 2 QUALITATIVE factors that you would consider in making your decision.
Thank you
