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A company produces a single product and operates at 80% of its capacity. Costs to produce its current monthly sales of 8,000 units follow. The
A company produces a single product and operates at 80% of its capacity. Costs to produce its current monthly sales of 8,000 units follow. The normal selling price is $22 per unit. A potential new customer wants to buy 1,000 units for $18 per unit. These units would be exported and not affect domestic sales. This order would require $3,000 of incremental fixed overhead and $1,000 of incremental fixed general and administrative costs. Should management accept the special offer? n answering the question: "Should management accept the special offer?": 1. Be specific about why management should or should not accept the offer (in financial terms). (Do NOT answer with a simple "YES" or "NO". State the contribution margin and net income (loss) if the offer is accepted. 2. What are some factors, other than financial, that could influence this decision? List at least two and explain
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