mohave corporation makes several varieties of beach umbrellas and accessories. it has been approached by a company called lost mine industries about producing a special order for a custom umbrella called the ultimate shade (us). the special-order umbrellas with the lost mine company logo would be distributed to participants at an upcoming convention sponsored by lost mine. lost mine offered to buy 2,100 us umbrellas at a price of $17 each. mohave currently has the excess capacity necessary to accept the offer. the following information is related to the production of the us umbrella: direct materials $ 8.00 direct labor 4.00 variable manufacturing overhead 4.00 fixed manufacturing overhead 2.50 total cost $ 18.50 regular sales price $ 25.00 required: compute the incremental profit (or loss) from accepting the special order. should mohave accept the special order? suppose the special order had been to purchase 2,600 umbrellas for $15.00 each. recompute the incremental profit (or loss) from accepting the special order under this scenario. assume mohave is operating at full capacity. calculate the special-order price per unit at which mohave would be indifferent between accepting or rejecting the special order.
