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Ayayai Manufacturing has an annual capacity of 80,900 units per year. Currently, the company is making and selling 78,300 units a year. The normal sales
Ayayai Manufacturing has an annual capacity of 80,900 units per year. Currently, the company is making and selling 78,300 units a year. The normal sales price is $100 per unit, variable costs are $65 per unit, and total fixed expenses are $2,000,000. An out-of-state distributor has offered to buy 6,000 units at $70 per unit. Ayayai's cost structure should not change as a result of this special order. By how much will Ayayai's income change if the company accepts this order?
will her income increase or decrease? by how much?
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