Minor Electric has received a special one-time order for 1,100 light fixtures (units) at $9 per unit. Minor currently produces and sells 8,500 units at $11.00 each. This level represents 85% of its capacity. Production costs for these units are $8.50 per unit, which includes $6.50 variable cost and $2.00 fixed cost. To produce the special order, a new machine needs to be purchased at a cost of $1,200 with a zero salvage value. Management expects no other changes in costs as a result of the additional production. Should the company accept the special order

Minor Electric

The company should accept the special order.  It makes a unit contribution of $1.41, which amounts to $1,551 in total.

Explanation:

a) Data and Calculations:

Special order received for light fixtures = 1,100 units

Price of special order = $9 per unit

Production and sales units = 8,500 = 85% capacity

Total capacity = 10,000 units (8,500/0.85)

Selling price at production and sales units = $11.00 each

Production costs per unit = $8.50

Variable cost per unit = $6.50

Fixed cost per unit = $2

Cost of new machine required for special order = $1,200

Special order costs:

Variable cost per unit = $7,150 ($6.50 * 1,100)

Cost of new machine =   1,200

Total relevant costs =   $8,350

Unit cost = $7.59 ($8,350/1,100)

Selling price = $9.00

Contribution per unit = $1.41

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi