The Deerfield Company Has Annual Productive Capacity of 60,000 Units

question 49

Essay

The Deerfield Company has annual productive capacity of 60,000 units per year. Budgeted operating results for 2006 are as follows: A wholesaler from another country wants to buy 5,000 units at a price of $8 per unit. All fixed costs would remain within the relevant range. Variable manufacturing costs would be the same per unit but variable selling costs would increase by $2 per unit on the special order only.
a. Determine whether the company should produce the special order.
b. Assuming Deerfield's objective is to maximize profit, if the customer wants a special order of 20,000 units, should Deerfield accept or reject the special order?

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Definitions:

Sexual Partners

Individuals with whom one has a sexual relationship or sexual contacts.

STIs

Sexually Transmitted Infections; diseases that are primarily spread through sexual contact.

Unwanted Pregnancy

A pregnancy that occurs when it is not desired by one or both of the potential parents.

Sexual Assessment

The process of evaluating an individual's sexual health, behavior, function, and concerns, often completed by healthcare providers to address and manage sexual issues.