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2. Finkelstein Furniture produces and sells 800 sofas per month and has capacity for 2,000 sofas per month. Each sofa normally sells for $2,000. Cost
2. Finkelstein Furniture produces and sells 800 sofas per month and has capacity for 2,000 sofas per month. Each sofa normally sells for $2,000. Cost information is as follows: a. The firm has received a special order for 1,500 sofas at a price of $800 per sofa. By how much will the firm's profits change if it accepts the order? Opportunity cost is 300 lost units Added CM from order =100CM/ unit 1,500=150,000 Lost CM (opportunity cost) =1300CM/ unit 300=390,000 Profits decrease by 240,000
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