Current sales are 50.000 units at ($25) per unit Production capacity is 80,000 units. Variable costs are

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Current sales are 50.000 units at \($25\) per unit Production capacity is 80,000 units. Variable costs are \($14\) per unit. Fixed costs are \($400,000.\) A special order for 10,000 units at \($20\) each is received. It will require the purchase of new equipment for \($40.000.\) The equipment will have a salvage value of \($5,000\) at the end of the contract. Should the offer be accepted?

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Financial & Managerial Accounting For Undergraduates

ISBN: 9781618533104

2nd Edition

Authors: Jason Wallace, James Nelson, Karen Christensen, Theodore Hobson, Scott L. Matthews

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