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Clyde Corp. has plant capacity to make 1,500,000 units of product X89, and is currently operating at 80% capacity. Current information pertaining to 89 is
Clyde Corp. has plant capacity to make 1,500,000 units of product X89, and is currently operating at 80% capacity. Current information pertaining to 89 is as follows: The fixed portion of total expected overhead was $1,620,000. Clyde Corp. has been negotiating with a new customer who would like 450,000 units of X89 for a sales price of $6.95 per unit; $3,000 has been spent to date on these negotiations. All other costs are expected to remain the same. Required: If Clyde Corp. were to accept the customer's offer, by how much would Clyde be better or worse off financially? Show all your work. Use incremental analysis
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