FDE Manufacturing Company Has a Normal Plant Capacity of 75,000

question 67

Essay

FDE Manufacturing Company has a normal plant capacity of 75,000 units per month.Because of an extra large quantity of inventory on hand, it expects to produce only 60,000 units in May.Monthly fixed costs and expenses are $150,000 ($2 per unit at normal plant capacity), and variable costs and expenses are $13 per unit.The present selling price is $25 per unit.The company has an opportunity to sell 5,000 additional units at $14.30 per unit to an exporter who plans to market the product under its own brand name in a foreign market.The additional business is therefore not expected to affect the regular selling price or quantity of sales of FDE Manufacturing Company.
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Prepare a differential analysis report, dated April 21 of the current year, on the proposal to sell at the special price.

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Definitions:

Abnormal Behavior

Actions or behaviors that are significantly deviant from what is considered normal or typical within a cultural or societal context.

Middle Ages

A historical period in Europe spanning roughly from the 5th to the late 15th century, characterized by feudalism, the rise of Christianity, and the lack of central government.

Gambling Addiction

A compulsive need to engage in gambling activities despite the negative effects it has on one’s life.

Mental Health

A state of well-being in which an individual realizes their own abilities, can cope with normal stresses of life, can work productively, and is able to make contributions to their community.