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

question 107

Essay

Marcy has received a special order for 2,000 units of its product at a special price of $60.The product normally sells for $80 and has the following manufacturing costs:
Assume that Marcy has sufficient capacity to fill the order without harming normal production and sales and all fixed overhead is unavoidable.
a.If Marcy accepts the order,what effect will the order have on the company's short-term profit?
b.What minimum price should Marcy charge to achieve a $20,000 incremental profit?
c.Now assume Marcy is currently operating at full capacity and cannot fill the order without harming normal production and sales.If Marcy accepts the order,what effect will the order have on the company's short-term profit?

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Definitions:

Hypercompetition Environment

A market condition characterized by rapid changes, intense competition, and strategic challenges among firms.

Strategic Intent

Strategic intent focuses and applies organisational energies on a unifying and compelling goal.

Organise Resources

The process of efficiently and effectively deploying and allocating organizational assets, including financial, human, and material resources.

Allocate Resources

The act of distributing available assets, such as time, money, and manpower, among various projects or departments to achieve organizational goals.