The following selected information is available for the year 2012 for Rocket Corporation.
Units 45,000
Sales $1,260,000
Variable cost #1 $146,250
Variable cost #2 $319,500
Variable cost #3 $216,000
Fixed cost #1 $202,000
Fixed cost #2 $170,000
Fixed cost #3 $90,000
Rocket Corporation has been approached by a company which wishes to place a onetime order for the product Rocket Corp sells. However, they re only willing to pay $21 for the product, however, this customer’s product requirements would result in a $2 increase in variable cost #1 and a $4,000 increase in fixed cost #2. The customer is willing to buy 6,000 units of the product under these terms.
Required:
How much money would Rocket Corporation make or lose on this special order?
Should Rocket Corporation accept this special order?
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