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3. Planet Yellow (PY) has just received a request from a business in Port Antonio which specializes in hospitality. The customer has asked PY to
3. Planet Yellow (PY) has just received a request from a business in Port Antonio which specializes in hospitality. The customer has asked PY to provide 100 specially modified go-carts at a price of $2,000 each. The normal selling price of the standard scooter model is $3,000. PY can easily modify its standard go-cart model to fit the specifications of the special order, and its unit product cost is $2,500 as shown below: If the order is accepted, none of the company's fixed manufacturing overhead costs will be avoided. In addition, PY will have to hire a production supervisor costing $40,000, and a graphic design artist $33,000 to design and spray paint the company's logo on the go-carts. The production supervisor says that she can handle the special order without disrupting any of the regularly scheduled production runs. Required: Advise the management of Planet Yellow (PY) whether the special order should be accepted. Show all workings
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