Capitol Has Received a Special Order for 2,000 Units of Its

question 73

Essay

Capitol has received a special order for 2,000 units of its product at a special price of $195.The product normally sells for $260 and has the following manufacturing costs:
Assume that Capitol has sufficient capacity to fill the order without harming normal production and sales and all fixed overhead is unavoidable.
a.If Capital accepts the order,what effect will the order have on the company's short-term profit?
b.What minimum price should Capital charge to achieve a $65,000 incremental profit?
c.Now assume Capital is currently operating at full capacity and cannot fill the order without harming normal production and sales.If Capitol accepts the order,what effect will the order have on the company's short-term profit?

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Definitions:

Character Traits

Enduring qualities or features of an individual's personality that are evident in their behavior and attitudes.

Ethical Behavior

Acting in ways consistent with societal norms and values, including honesty, fairness, and integrity, particularly in professional settings.

Morally Disengage

The psychological process where individuals justify their unethical actions to themselves or others, thus easing the guilt associated with such behaviors.

Insurance Company

A business that provides coverage, in the form of compensation resulting from loss, damages, injury, treatment, or hardship in exchange for premium payments.