Silver Lake Cabinets Is Approached by Ms

question 98

Essay

Silver 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:

Silver Lake Cabinets has excess capacity.Ms.Zhang wants the cabinets in cherry rather than oak,so direct material costs will increase by $30 per unit.
Required:
a.For Silver Lake Cabinets,what is the minimum acceptable price of this one-time-only special order?
b.Other than price,what other items should Silver 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:

Valid Deed

A valid deed is a legally enforceable document that effectively transfers ownership of real property from one party to another, and must meet specific requirements, including the signature of the grantor and delivery.

Recording

The act of documenting or entering official information, such as deeds and mortgages, into public records.

Enabling Statute

A law that gives a government entity or agency the authority to take specific actions.

Zoning

Regulations governing the use of land and structures within certain areas to control and direct urban growth and land use.