Accept special sales order in addition to the product cost


Accept special sales order? In addition to the product cost information for Lakeside, Inc., in Mini Exercise 16.1, Lakeside has received an offer from a nonprofit organization to buy 5,000 units at $30 per unit. Lakeside currently has unused production capacity.
In Mini Exercise 16.1, Lakeside, Inc., produces a product that currently sells for $36 per unit. Current production costs per unit include direct materials, $10; direct labor, $12; variable overhead, $5; and fixed overhead, $5. Product engineering has determined that certain production changes could refine the product quality and functionality. These new production changes would increase material and labor costs by 20% per unit.

Required:

Should Lakeside accept this special sales order?

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Managerial Accounting: Accept special sales order in addition to the product cost
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