Mason textile company manufactures high quality bed sheets


Mason textile company manufactures high quality bed sheets and sells them in sets to a well known retail company for 64$ a set. Mason has sufficient capacity to produce 150000 sets of sheets anually. the retail company currently purchases 100000 sets each year. mason unit level cost is 36$ per set and its fixed cost is 840000 per year. a motel chain has offered to purchase 15000 sheet sets from mason for 45$ per set. If mason accepts the order the contract will prohibit the motel chain from reselling the bed sheets. required: should mason accept or reject the special order? support your answer with appropriate computation.

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Operation Management: Mason textile company manufactures high quality bed sheets
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