Problem:
Snider, Inc., which has excess capacity, received a special order for 3,000 units at a price of $12 per unit which it could produce with the excess capacity. Currently, production and sales are anticipated to be 10,000 units without considering the special order. Budget information for the current year sales of 10,000 units follows.
• Sales $190,000
• Less: cost of goods sold 145,000
• Gross Margin $45,000
Cost of goods sold includes $45,000 of fixed manufacturing cost that will be incurred not matter the decision on the special order. If the special order is accepted, calculate how much the company's gross margin will change. Should you accept or not accept the special order?
Note: Please explain comprehensively and give step by step solution.