Particular OrderDuvernoy Industries produces high-quality vehicle seat covers. Its success within the business is because of its high quality, though all of its prospects, the automakers, are very price aware and negotiate for value cuts on all massive orders. Noting that the auto provide enterprise is changing into increas- ingly aggressive, Duvernoy is on the lookout for a technique to meet the problem. It’s negotiating with Chen, Inc., a big mail-order auto elements and equipment retailer, to buy a big order of seat covers. A lot of Duvernoyâs enterprise is seasonal and cyclical, fluctuating with the various calls for of the big automakers. Duvernoy want to maintain its vegetation busy all year long by lowering these seasonal and cyclical fluctuations. Preserving the circulation of product shifting by the vegetation at a gentle degree is useful in protecting prices down; additional extra time and machine setup and restore prices are incurred when manufacturing ranges fluctuate. Chen has agreed to a big order however solely at a value of $30 per set. The particular order will be produced in a single batch with obtainable capability. Duvernoy ready these knowledge:.transtutors.com/qimg/abc846bb-cfbc-4a1e-b007-c45e4460794c.png”>Subsequent monthâs working info with out the particular order (per unit, for 10,000 models, made in 10 batches of 1,000 every)Gross sales value$80Per unit costsVariable manufacturing prices20Variable advertising costs8Fixed manufacturing prices40Mounted advertising costs3Special order informationSales 2,000 unitsSales value per unit $30.transtutors.com/qimg/abc846bb-cfbc-4a1e-b007-c45e4460794c.png”>No variable advertising prices are related to this order, however Marc Jones, the firmâs president, has spent $6,000 through the previous three months making an attempt to get Chen to buy the particular order.Required1. How a lot will the particular order change Duvernoy Industriesâ whole working revenue?2. How would possibly the particular order match into Duvernoyâs aggressive scenario?
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