Refer to Flyaway Company, which produces window fans.
Analyzing a Special-Order Decision
Flyaway Company has just received a one-time offer to purchase 10,000 units of its Breezy model for a price of $20 each. The Breezy model costs $25 to produce ($17 in variable costs and $8 of fixed overhead). Because the offer came during a slow production month, Flyaway has enough excess capacity to accept the order.
1.Should Flyaway accept the special order?
2.Determine the impact the special order would have on Flyaway’s net income.
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