Fanning Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Fanning’s normal sales territory, asks Fanning to pour 51 slabs for Lancing’s new development of homes. Fanning has the capacity to build 380 slabs and is presently working on 220 of them. Lancing is willing to pay only $2,580 per slab. Fanning estimates the cost of a typical job to include unit-level materials, $860; unit-level labor, $590; and an allocated portion of facility-level overhead, $1,200. Required Calculate the contribution to profit from the special order. Should Fanning accept or reject the special order to pour 51 slabs for $2,580 each?
Fanning Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Fanning’s normal sales territory, asks Fanning to pour 51 slabs for Lancing’s new development of homes. Fanning has the capacity to build 380 slabs and is presently working on 220 of them. Lancing is willing to pay only $2,580 per slab. Fanning estimates the cost of a typical job to include unit-level materials, $860; unit-level labor, $590; and an allocated portion of facility-level overhead, $1,200.
Required
Calculate the contribution to profit from the special order. Should Fanning accept or reject the special order to pour 51 slabs for $2,580 each?
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