(a) Is it justified to reject the order? (b) Briefly explain four qualitative factors that are relevant when evaluating such type of decision.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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 Kimberly Ltd manufactures and markets a Fizzy drink, which is sold for Rs 25 per can. Current output is 30,000 cans per month, which represent 60%of capacity. The company has the opportunity to utilize their surplus capacity by selling their product at Rs 16 per can to a supermarket chain. Total costs for the last month were Rs 550,000 , of which Rs 130,000 were fixed costs. The immediate reaction from the manager was to reject the order because total unit cost exceeds the special price. Required: (a) Is it justified to reject the order? (b) Briefly explain four qualitative factors that are relevant when evaluating such type of decision. 

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