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2. Acme Brick Company has an order to make 25,000 bricks. It normally charges $6.95 per brick but this customer is only willing to
2. Acme Brick Company has an order to make 25,000 bricks. It normally charges $6.95 per brick but this customer is only willing to pay $3.85. Presently Acme is operating at 30% capacity, but generally it produces 99,000 bricks per month. Its cost structure is as follows. Total Fixed Cost $125,000 Variable Cost Per Brick $3.05 Allocate fixed costs based on $1.26 per brick. A. Should Acme Brick Company accept the special order? Explain and show your calculations. Show the appropriate contribution margin and any other analysis you feel necessary. Note your answer "yes" or "no" only counts for one point. Show your work and explain if you expect points. B. Assume a normal selling price of $6.95 per brick, how many bricks will Acme have to sell to break even?
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