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Franklin Company manufactures a personal computer designed for use in schools and markets it under its own label. Franklin has the capacity to produce 44,000
Franklin Company manufactures a personal computer designed for use in schools and markets it under its own label. Franklin has the capacity to produce 44,000 units a year but is currently producing and selling only 20,000 units a year. The computer's normal selling price is $1,720 per unit with no volume discounts. The unit-level costs of the computer's production are $510 for direct materials, $160 for direct labor, and $190 for indirect unit-level manufacturing costs. The total product- and facility-level costs incurred by Franklin during the year are expected to be $2,210,000 and $803,000, respectively. Assume that Franklin receives a special order to produce and sell 3,040 computers at $1,220 each. Required Calculate the contribution to profit from the special order. Should Franklin accept or reject the special order? Contribution to profit Should Franklin accept or reject the special order
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