The Book Company produces 47,500 books a month, which is 95% of factory capacity....
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The Book Company produces 47,500 books a month, which is 95% of factory capacity. Variable manufacturing costs are $5 per unit. Books are usually sold for $15 apiece. Fixed manufacturing costs are $80,000 per month. The Book Company has just received a special order from XYZ Inc. to produce an extra 3,000 books for $7.75. In order to make this order, the company will need to incur an addition $1,200 in fixed costs. What advice do you have for the book company in terms of this order?
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