Nike owns Cole Haan. The men's loafer is in high demand. Suppose sales on this loafer during the present year are expected to hit the 1,000,000 mark. Full plant capacity is 1,150,000 units, but the 1,000,000 unit mark is considered normal capacity. The following unit price and cost breakdown is applicable: During March, the company received 2 special order requests. These orders are not part of the budgeted 1,000,000 unit sales for the year but there is sufficient capacity for possibly one order to be accepted. Orders received and their terms are as follows: Order from Nordstrom: 75,000 loafers at $136.00 per unit, deluxe packaging. Order from Macy's: 90,000 loafers at $130,000 per unit, standard packaging. No Variable Selling costs will be incurred.
1. Analyze the profitability of each of these 2 special orders. Which special order should be accepted?
2. What other aspects need to be considered in addition to profitability?