Marsdon Company Has an Annual Production Capacity of 15,000 Units

question 108

Essay

Marsdon Company has an annual production capacity of 15,000 units.The costs associated with production and sale of the company's product are given below: The company presently is selling 12,000 units annually at a selling price of $28 each.A special order has been received from a distributor who wants to purchase 3,000 units at a special price of $20 each.Regular sales would not be affected by this order and the order could be filled without any impact on total fixed costs.Sales commissions on the special order would be reduced by one-third.

Required:
Determine whether the company should accept the special order.

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Definitions:

Discretionary Responsibilities

Voluntary activities and behaviors that go beyond the basic requirements of the job, intended to benefit the organization or its stakeholders.

Social Responsibility

An ethical framework suggesting that an entity, be it an organization or individual, has an obligation to act for the benefit of society at large.

Defensive Strategy

Tactics employed by a company to protect its market share, products, or services from competitors or potential threats.

Defensive Strategy

A business approach aimed at protecting the company's current market position and assets from potential threats or competition.