Fondray Inc. has been approached by a new customer with an offer to buy 5,000...
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Fondray Inc. has been approached by a new customer with an offer to buy 5,000 units of it model A586 at a price of $18.50 per unit. Normally, the company sells the product for $25 per unit. Currently, the company is operating significantly below the maximum production capacity and accepting this offer will not affect sales to the company's other customers. Costs per unit are as follows: Direct materials Direct labour Variable overhead Fixed overhead $12.50 $6.00 $3:00 $3.00 Fixed overhead costs will not be affected by whether or not the special order is accepted. What should the company do? Fixed overhead costs will not be affected by whether or not the special order is accepted. What should the company do? Do not accept the order. It would decrease income by $8,000. None of these options is correct. Do not accept the order. It would decrease income by $15.000. Accept the order to increase income by $7.500
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