Dapper Dan Produces a Man's Suit That Sells for $200

question 70

Essay

Dapper Dan produces a man's suit that sells for $200. Although the company's production capacity is 3,000 suits per year, only 2,500 suits are currently being produced and sold. At this level of production, the company incurs the following costs: $$\begin{array} { | l | r | } \hline \text { Unit-level material cost per suit } & \$ 80 \\\hline \text { Unit-level labor cost per suit } & \$ 40 \\\hline \text { Unit-level overhead per suit } & \$ 20 \\\hline \text { Batch-level set-up cost for each batch of } 500 \text { suits } & \$ 1,200 \\\hline \text { Annual product-level costs } & \$ 15,000 \\\hline \text { Allocated facility-level costs } & \$ 50,000 \\\hline\end{array}$$
Easton Clothiers has offered to purchase 500 suits as a one-time special purchase at a price of $135.
Required:
Prepare a quantitative analysis that indicates whether the special order should be accepted.

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Definitions:

Adaptive Capacity

Refers to the ability of a system, organization, or individual to adjust to changes, recover from disruptions, and continue to function.

Emotional Reactivity

The extent to which an individual responds emotionally to stimuli, affecting their mood and behavior.

Behavioral Expectations

These are societal, cultural, or personal standards of behavior that individuals are assumed to follow in various social settings.

Negligent Parents

Caregivers who fail to provide adequate attention, supervision, or care to their children, leading to potential harm or developmental issues.