question archive Fanning Company manufactures a personal computer designed for use in schools and markets it under its own label
Fanning Company manufactures a personal computer designed for use in schools and markets it under its own label
Subject:BusinessPrice: Bought3
Fanning Company manufactures a personal computer designed for use in schools and markets it under its own label. Fanning has the capacity to produce 41,000 units a year but is currently producing and selling only 11,000 units a year. The computer's normal selling price is $1,610 per unit with no volume discounts. The unit-level costs of the computer's production are $430 for direct materials, $200 for direct labor, and $120 for indirect unit-level manufacturing costs. The total product- and facility-level costs incurred by Fanning during the year are expected to be $2,240,000 and $803,000, respectively. Assume that Fanning receives a special order to produce and sell 3,100 computers at $1,240 each. Required Calculate the contribution to profit from the special order. Should Fanning accept or reject the special order? Contribution to profit Should Fanning accept or reject the special order?
