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Rowe Tool and Die ( RTD ) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted
Rowe Tool and Die RTD produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD RTD expects to sell units during the quarter. RTD carries no inventories. Fixed costs included in this income statement are $ for depreciation on plant and machinery and miscellaneous factory operations and $ for administrative costs. RTD has received a request for fittings to be produced in the next quarter from Endicott Manufacturing. Endicott has never purchased from RTD although they have been a local company for many years. Endicott has offered to pay $ per unit. RTD can easily produce the units with its existing capacity. Production of the units will incur all variable manufacturing costs but no fixed manufacturing costs. No administrative costs will be incurred because of the order.
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