Assuming that you are now running CADBURY Nigeria PLC. You receive a special order from...
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Accounting
Assuming that you are now running CADBURY Nigeria PLC.
You receive a special order from NIGER for a bulk volume of 10,000,000 piece of chocolates to be delivered within one month.
The company still have some excess capacity to produce 50,000,000 of the special chocolate.
The special chocolate are normally sold for N 100 but the NIGER want a 15% discount on the price.
There is no other expenses incurred as the NIGER group will pick up the chocolate for CADBURYs factory.
Required :
Should CADBURY entertain the order ?. How much profit the company can expect from the order?
If the company is asked to make a new version of the product which will increase the raw materials by 20% and the company is willing to pay N 125 for each piece of the chocolate, should the company accept the order ?
What are the qualitative consideration in the decision ?
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