Bates Golf Supply Produces a Golf Bag That Sells for $220

Bates Golf Supply produces a golf bag that sells for $220. Although the company's production capacity is 5,000 bags per year, only 4,000 bags are currently being produced and sold. The production costs for 4,000 bags are as follows: $$\begin{array} { | l | r | } \hline \text { Unit-level material cost } & \$ 3300,000 \\\hline \text { Unit-level labor cost } & 240,000 \\\hline \text { Unit-level overhead } & 75,000 \\\hline \text { Batch-level setup costs (500 units per batch) } & 16,000 \\\hline \text { Product-level costs } & 20,000 \\\hline \text { Allocated facility-level costs } & 25,000 \\\hline\end{array}$$
Golf Mart Stores has offered to purchase 1,000 golf bags as a one-time special purchase at a price of $170 per bag.
Required:
1) Prepare a quantitative analysis that indicates whether the special order should be accepted.
2) What qualitative factors should be considered in this special order decision?

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1) Evaluation of special order: 2) Qual...

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