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1) In a month, Al Zahra Company normally produces and sells 10000 units. The selling...

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Accounting

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1) In a month, Al Zahra Company normally produces and sells 10000 units. The selling price per unit is OMR 25 and there is excess capacity to produce an additional unit of 5000. Variable manufacturing cost per unit is OMR OMR 15. Total fixed manufacturing costs are OMR 50,000. Variable operating cost is OMR 5 per unit and fixed operating costs total OMR 20,000. A customer placed a special order for 2000 units for OMR 20 each. The customer is willing to shoulder the delivery costs; hence the business will NOT incur additional variable operating costs of OMR 5. a) Should the company accept or reject the special order? Justify your answer. b) What if the order was for 3000 units at a selling price of OMR 14? Your are required to answer following questions under each section given below: 1) Introuduction a) Explain generally about situation where managers "accept/reject special sales order. II) Discussion a) Answer to the question here II Reviews / Recommendations -write in your own words- IV) Conclusion V)-write in your own words- vi) Bibliography/References -if any

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