Loft Lake Cabinets Is Approached by Ms

question 108

Essay

Loft Lake Cabinets is approached by Ms. Jenny Zhang, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. The following per unit data apply for sales to regular customers:

Loft Lake Cabinets has excess capacity. Ms. Zhang wants the cabinets in cherry rather than oak, so direct material costs will increase by $15 per unit.
Required:
a.For Loft Lake Cabinets, what is the minimum acceptable price of this one-time-only special order?
b.Other than price, what other items should Loft Lake Cabinets consider before accepting this one-time-only special order?
c.How would the analysis differ if there was limited capacity?

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Definitions:

Biopsy-Proven

Confirmation of a disease or condition by examining tissue samples removed from a living body.

Diagnostic Tool

An instrument or method used for identifying the nature or cause of a particular phenomenon, often related to health conditions.

Societal Consideration

The process of taking into account the impacts and implications of actions or policies on the society as a whole.

Scientific Evidence

Information obtained through systematic observation or experimentation that serves as a basis for knowledge or conclusions.