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A manufacturer is producing a quality product. The cost of producing one unit is as follows: Direct material $ 2.50 Direct labor $ 3.25 Variable

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A manufacturer is producing a quality product. The cost of producing one unit is as follows: Direct material $ 2.50 Direct labor $ 3.25 Variable factory overhead $ 8.75 Fixed factory overhead $ 12.00 Variable selling, general & administrative costs $ 8.75 Fixed selling, general & administrative costs $ 2.00 The fixed factory overhead and fixed selling, and general & administrative cost is allocated based on an assumption that the business will produce 200,000 units per year. The company has capacity to produce 300,000 units without impacting either category of fixed costs. Required: (a) The market has become very competitive, and management has requested to know the break-even price that can be charged for a unit assuming production and sale of 200,000 units, (b) Management has received a special request for 100.000 units. The order specifies a per unit of $35. Will profit increase or decrease if the order is accepted

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