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Good evening, COuld you please help me with this exercise. Thanks, The NY memorabilia company produces a souvenir plate which normally sells for $79.95. The
Good evening, COuld you please help me with this exercise. Thanks,
The NY memorabilia company produces a souvenir plate which normally sells for $79.95. The compaany produces 1,500 plates anually but has the capacity to produce 2,000 plates. A special order for manufacturing and selling 200 plates at $49.95 has been received which would not disrupt current operations. Current costs for the place are as follows: Direct materials Direct labor Variable overhead Fixed overhead Total $17.00 $14.50 $4.00 $5.00 $40.50 In addition the customer would like to add a date to eaxh plate which would require an additional $2 per plate in additional labor costs and NY memorabilia company would also have to purchase a piece of equipment to create the date which would cost $1,200. This equipment would not have any other uses. With regard to the special order only: a- Incremental revenues will exceed incremental costs by $890 b- Incremental revenues will exceed incremental costs by $1290 c- Incremental revenues will exceed incremental costs by $2490 d- Incremental revenues will exceed incremental costs by $2890Step by Step Solution
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