Peters, Inc

question 15

Not Answered

Peters, Inc. sells a single product and reports the following results from sales of 100,000 units: A foreign company wants to purchase 15,000 units. However, they are willing to pay only $36 per unit for this one-time order. They also agree to pay all freight costs. To fill the order, Peters will incur normal production costs. Total fixed overhead will have to be increased by $60,000 to pay for equipment rentals and insurance. No additional administrative costs (variable or fixed) will be incurred in association with this special order.
Required:
(1) Should Peters accept the order if it does not affect regular sales? Explain.
(2) Assume that Peters can accept the special order only by giving up 5,000 units of its normal sales. Should Peters accept the special order under these circumstances?

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Definitions:

Space Threat

A situation in which a person threatens to invade another’s spatial territory.

Interloper

An individual who becomes involved in a situation or place where they are not wanted or do not belong.

Sales Presentation

A promotional speech or demonstration aimed at convincing a potential buyer to purchase a product or service.

Open-ended Questions

Queries that cannot be answered with a simple "yes" or "no," encouraging expansive and informative responses.