The Shoop Corporation Produces and Sells a Part Used in the Production

question 25

Essay

The Shoop Corporation produces and sells a part used in the production of tractors.The unit costs associated with this part are as follows:

Jupiter Company has approached Shoop Corporation with an offer to purchase 20,000 units of this part at a price of $.72.Accepting this special sales order will put idle manufacturing capacity to use and will not affect regular sales.Total fixed costs will not change.
Determine whether or not the special order should be accepted.Justify your conclusion.

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Definitions:

Bystander Apathy

The phenomenon where individuals are less likely to offer help to a victim when other people are present, often attributed to the diffusion of responsibility.

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Agricultural Societies

Communities whose economy and way of life are primarily based on agriculture and farming practices.

Technological Innovations

Novel inventions and improvements in technology that significantly change how tasks are accomplished or lead to the creation of new products.