Chris is approached by a regular customer of his who wants to negotiate a special...
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Accounting
Chris is approached by a regular customer of his who wants to negotiate a special order for 70 extra computers to outfit a gaming cafe business that the customer is starting. However, the customer wants a special price and is not willing to pay more than $1,000 per computer.
Chris is interested, as he has the capacity to fill the order. However, he feels that he needs to trim his own costs first. Chris asks his componentry supplier for a 50% discount on the additional 70 CPU and RAM components.
(b) If Chris receives the requested discount and accepts the special order of 70 computers at $1,000 each, what will be his profit for the month? (4 marks)
(c) If Chris' supplier only offers a 5% discount on the additional CPU and RAM components, should Chris accept the special order? Explain your answer and support it with calculations. (4 marks)
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