Generalware,Inc

question 108

Essay

Generalware,Inc.sells a single product and reports the following results from sales of 100,000 units: A foreign company wants to purchase 15,000 units.However,they are willing to pay only $36 per unit for this one-time order.They also agree to pay all freight costs.To fill the order,Generalware will incur normal production costs.Total fixed overhead will have to be increased by $60,000 to pay for equipment rentals and insurance.No additional administrative costs (variable or fixed)will be incurred in association with this special order.
Required:
(1)Should Generalware accept the order if it does not affect regular sales? Explain.
(2)Assume that Generalware can accept the special order only by giving up 5,000 units of its normal sales.Should the company accept the special order under these circumstances?

---

Definitions:

Crucifixion

An ancient method of execution where the victim is tied or nailed to a large wooden cross and left to hang until dead.

Correct

Correct refers to being free from errors or mistakes, or conforming to fact or truth.

Democratic Subjectivism

The belief or principle that individual subjective opinions and preferences should direct democratic decision-making processes and policies.

Good Taste

The ability to make discerning judgments about aesthetic, stylistic, or cultural matters, often associated with politeness, sophistication, or a sense of propriety.