Swan Manufacturing Is Approached by a Customer to Fulfill a One-Time-Only

question 137

Essay

Swan Manufacturing is approached by a customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The following per unit data apply for sales to regular customers:

Swan Manufacturing has excess capacity.
Required:
a.What is the full cost of the product per unit if the marketing costs is $3,000?
b.What is the contribution margin per unit?
c.Which costs are relevant for making the decision regarding this one-time-only special order? Why?
d.For Swan Manufacturing, what is the minimum acceptable price of this one-time-only special order?
e.For this one-time-only special order, should Parker and Spitzer Manufacturing consider a price of $5,400 per unit? Why or why not?

---

Definitions:

ATP

Abbreviation for adenosine triphosphate, a molecule that stores and transmits chemical energy within cells, vital for many cellular processes.

Plasmodesmata

Microscopic channels that traverse the cell walls of plant cells and some algal cells, facilitating intercellular communication and transport.

Desmotubule

A central rod-like structure of desmosomes, which are special cell-cell adhesion structures, facilitating cellular communication and cohesion in multicellular organisms.

Smooth ER

A type of endoplasmic reticulum without ribosomes, involved in lipid synthesis, detoxification, and calcium ion storage.