Use the following information for the next 3 questions.
Taylor Enterprises sells its product for $40 per unit. Taylor recently received a special order from a customer for 20,000 units. Production costs per unit for regular sales are:
-Suppose that the special order price is $600,000 for all 20,000 units, but there is not sufficient capacity to fill the order; 8,000 units of regular business will be replaced by the special order if it is accepted. Should Taylor accept the special order and why?
A) No, because profits will decrease by $56,000
B) Yes, because profits will increase by $40,000
C) No, because profits will decrease by $24,000
D) No, because profits will decrease by $280,000

Question

Use the following information for the next 3 questions.
Taylor Enterprises sells its product for $40 per unit. Taylor recently received a special order from a customer for 20,000 units. Production costs per unit for regular sales are: 
-Suppose that the special order price is $600,000 for all 20,000 units, but there is not sufficient capacity to fill the order; 8,000 units of regular business will be replaced by the special order if it is accepted. Should Taylor accept the special order and why?
A) No, because profits will decrease by $56,000 
B) Yes, because profits will increase by $40,000 
C) No, because profits will decrease by $24,000 
D) No, because profits will decrease by $280,000

Quizplus · Accepted Answer

The Answer of Use the following information for the next 3 questions.
Taylor Enterprises sells its product for $40 per unit. Taylor recently received a special order from a customer for 20,000 units. Production costs per unit for regular sales are: 
-Suppose that the special order price is $600,000 for all 20,000 units, but there is not sufficient capacity to fill the order; 8,000 units of regular business will be replaced by the special order if it is accepted. Should Taylor accept the special order and why?
A) No, because profits will decrease by $56,000 
B) Yes, because profits will increase by $40,000 
C) No, because profits will decrease by $24,000 
D) No, because profits will decrease by $280,000

Use the Following Information for the Next 3 Questions