Question

Omega Ltd. has idle capacity and receives a special export order for 2,000 units at ₹420 per unit. Normal price = ₹500. Unit variable cost = ₹350. Fixed costs are already covered by regular business. The export order requires special packing costing ₹10 per unit, with no impact on regular business. Should the company accept the order?

A Reject, as the offer price is below normal price
B Accept, since it gives positive contribution
C Reject, as it does not cover full cost
D Accept only if export duty is exempted
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