1. Decide whether to accept or reject a special order.
Viking Corporation is operating at 80% if capacity; which means it produces 8,000. Variable cost is $100 per unit. Wholesaler Y offers to buy 2,000 additional units at $120 per units. Wholesaler Z proposes to buy 1,500 additional units at $140 per unit. Which offer, if either, should Viking Corporation accept?
2. Decide whether to keep or eliminate a product line.
Analysis of Hair Care Company's citrus hair conditional reveals that it is losing $5,000 annually. The company sells 5,000 units citrus hair conditioner each year at $10 per unit. Variable costs are $6 per unit. None of the company's fixed costs would be saved if the citrus hair conditioner were eliminated. What would be the increase or decrease in company net income if citrus hair condition were eliminated?