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Bonita Company has contacted Sandhill Inc. with an offer to sell it 4500 wickets for $19.00 each. If Sandhill makes the wickets, variable costs are
Bonita Company has contacted Sandhill Inc. with an offer to sell it 4500 wickets for $19.00 each. If Sandhill makes the wickets, variable costs are $12 per unit. Fixed costs are $11 per unit: however, $4 per unit is avoidable. Should Sandhill make or buy the wickets? What are the savings of this choice? Buy: savings =$13500 Buy: savings =$18000 Make; savings =$13500 Make: savings = $27000 Sunland Ltd. incurs the following costs to make each custom-made shelf: materials of $13, labour of $17, variable overhead of $3, and fixed overhead of $4. Each shelf normally sells for $52. A customer is offering to buy 1.900 units at $39 each. Sunland will incur additional costs of $2 per shelf to imprint a logo and to pay for shipping. (a) Prepare an incremental analysis for the special order. (b) Should Sunland accept the special order
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