Monty, Finland’s second largest homebuilder, has approached Wilson with an offer to buy 75,000 windows during the coming year. Given the size of the order, Monty has requested a 40% volume discount on Wilson’s normal selling price. Calculate the contribution from special order. (If net contribution is negative, enter amount with a negative sign, e.g. -5,285 or parentheses, e.g. (5,285). Round answer to 0 decimal places, e.g. 8,971.)
Net contribution from special order \$

Return to the original data. Monk Builders has just signed a contract with the state government to replace the windows in low-income housing units throughout the state. Monk needs 80,000 windows to complete the job and has offered to buy them from Wilson at a price of \$120.00 per window. Monk will pick up the windows at Wilson’s plant, so Wilson will not incur the \$2 per window shipping charge. In addition, Wilson will not need to pay a distributor’s commission, since the windows will not be sold through a distributor.

Calculate the contribution from special order, contribution lost from regular sales and the net contribution from special order.
Contribution from special order\$

Contribution lost from forgone regular sales\$

Net contribution from special order\$

If Wilson decides to accept Monk’s offer, it will need to find an additional 30,000 windows to meet both the special order and normal sales. Teal Mountain Panes has offered to provide them to Wilson at a price of \$140.00 per window. Teal Mountain Panes will deliver the windows to Wilson, and Wilson would then distribute them to its customers.
Calculate total contribution from outsourcing.

Total contribution from outsourcing\$

Sample Solution