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7. Accept or reject a special sales order. Dasmarinas Company produces organic fertilizer which is retailed through farm supply companies. Presently, the company uses 85%
7. Accept or reject a special sales order. Dasmarinas Company produces organic fertilizer which is retailed through farm supply companies. Presently, the company uses 85% of its maximum capacity of 2,000 tons a year. Under its present capacity, the company has the following costs structure of producing a ton of fertilizer: The average saies price or the rertilzer IS P10,000 per ton. The firm has been approached by a Malaysian company about supplying 250 tons of fertilizer next year at a price of - P6,800 per ton, FOB Dasmarinas Company's plant. No production modifications would t. be necessary to fulfill the order from the Malaysian Company. Required: 1. What are the relevant costg to the decision to accept this order? 2. What would be the peso effect on pretax income if this order is accepted? 3. Determine the opportunity costs if Dasmarinas Company rejects the special order
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