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Cranberry Inc. has received a special order for 130 unite of its product at a special price of $1700. The product normally sells for $2200
Cranberry Inc. has received a special order for 130 unite of its product at a special price of $1700. The product normally sells for $2200 ans has the following manufacturing costs:
\begin{tabular}{lr} & Cost per Unit \\ Direct materials & $620 \\ Direct labor & 320 \\ Variable manufacturing overhead & 420 \\ Fixed manufacturing overhead & 520 \\ Total unit cost & $1,880 \\ \hline \end{tabular} Assume that Cranberry has sufficent capacity to fill the order eithout harmjng normal production and sales. If Crnaberry accepts the order, what effect will the order have on the company's short term profit?
a) 44200 increase
b) 23400 increase
c) 23400 decrease
d) 67600 decrease
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