Business, 30.03.2020 17:58 mackdoolittle1
Homestead Jeans Co. has an annual plant capacity of 65,000 units, and current production is 45,000 units. Monthly fixed costs are $54,000, and variable costs are $29 per unit. The present selling price is $42 per unit. On November 12 of the current year, the company received an offer from Dawkins Company for 18,000 units of the product at $32 each. Dawkins Company will market the units in a foreign country under its own brand name. The additional business is not expected to affect the domestic selling price or quantity of sales of Homestead Jeans Co.
a. Prepare a differential analysis on whether to reject or accept the Dawkins order.
b. What is the minimum price per unit that would produce a positive contribution margin?
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Homestead Jeans Co. has an annual plant capacity of 65,000 units, and current production is 45,000 u...
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