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Connected Limited produces cell phone chargers. The regular selling price is R400 per unit. The cost of goods sold amounts to R 290 and normal
Connected Limited produces cell phone chargers. The regular selling price is R400 per unit. The cost of goods sold amounts to R 290 and normal monthly production is 2 000 chargers. Average fixed manufacturing cost is R120 000 per month. Selling and administrative costs are fixed and amount to R30 000 per month. Connected Limited has just received a special order for 500 units at R320 per charger. This is a once of deal, and the regular selling price will not be affected if Connect accepts the order. Assuming Connected Limited has excess capacity, determine the effect on profits of accepting the order? A R45 000 increase. A R30 000 decrease
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