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PS-17 PRICING A SPECIAL ORDER The Drosselmei er Corporation, which makesChristmas nutcrackers, has an annual plant capacity of 2,400 product units. Its predicted operating results (in euros) for the year are Production and sales of 2,000 units, total sales 180,000 Manufacturing costs: Fixed (total) Variable (per unit) ol 60,000 e 26 Selling and administrative expenses: Fixed (total) Variable (per unit) 30,000 E 10 Compute, ignoring income taxes: 1. If the company accepted a special order for 300 units at a selling price of 40 each, how would the total predicted net income for the year be affected, assuming no effect on regu- lar sales at regular prices? 2. Without decreasing its total net income, what is the lowest unit price for which the requirement 2 above, list the numbers given in the problem that are not ties Drosselmeier Corporation could sell an additional 100 units not subject to any variable selling and administrative expenses, assuming no effect on regu 3. In solving 4. Compute the expected annual net income (with no special orders) if plant capacity can relevant. doubled by adding additional facilities at a cost of 500,000. Assume that these facili have an estimated life of five years with no residual scrap value, and that the current u selling price can be maintained for all sales. Total sales are expected to equal the new plart capacity each year. No changes are expected in variable costs per unit or in total fixed costs except for depreciation nit

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