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Crandon Sheleves has the capacity to produce 50,000 maple shelves per year and is currently selling 44,000 shelves for $32 each. Bob's Furniture approached Crandon
Crandon Sheleves has the capacity to produce 50,000 maple shelves per year and is currently selling 44,000 shelves for $32 each. Bob's Furniture approached Crandon about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Crandon usually packages shelves for Lowes's at a price of $1.50 per shelf. The $1.50 per shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept this order. Based on this information, if Crandon accepts the special order, their profit will by $ Note: Indicate if profit will increase or decrease and by what amount. Question 5 Goldstein Construction plans to discontinue its roofing segment. Last year, this segment generated a contribution margin of $65,000 and incurred $70,000 in fixed costs. Discontinuing the segment will allow the company to avoid half of the fixed costs. The discontinuation will cause profit to by $ Note: Indicate whether profit will increase or decrease and by what amount
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