Franklin Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Franklin’s normal sales territory, asks Franklin to pour 52 slabs for Lancing’s new development of homes. Franklin has the capacity to build 500 slabs and is presently working on 120 of them. Lancing is willing to pay only $2,630 per slab. Franklin estimates the cost of a typical job to include unit-level materials, $910; unit-level labor, $470; and an allocated portion of facility-level overhead, $1,320.
Required: Calculate the contribution to profit from the special order. Should Franklin accept or reject the special order to pour 52 slabs for $2,630 each?

Question

16-06-2024
Business

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Franklin Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Franklin’s normal sales territory, asks Franklin to pour 52 slabs for Lancing’s new development of homes. Franklin has the capacity to build 500 slabs and is presently working on 120 of them. Lancing is willing to pay only $2,630 per slab. Franklin estimates the cost of a typical job to include unit-level materials, $910; unit-level labor, $470; and an allocated portion of facility-level overhead, $1,320.
Required: Calculate the contribution to profit from the special order. Should Franklin accept or reject the special order to pour 52 slabs for $2,630 each?

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