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Gostkowski Company produces and sells 90,000 boxes of specialty foods each year. Gostkowski Company produces and sells 90,000 boxes of specialty foods each year. Each
Gostkowski Company produces and sells 90,000 boxes of specialty foods each year.
Gostkowski Company produces and sells 90,000 boxes of specialty foods each year. Each box contains the same assortment of food. The company has computed the following annual costs: Gostkowski normally charges $23 per box. A new distributor has offered to purchase 9,000 boxes at a special price of $20 per box Gostkowski will incur additional packaging costs of $2 per box to complete this order. Requirements (a) Suppose Gostkowski has surplus capacity to produce 9,000 more boxes. What will be the effect on Gostkowski's income if it accepts this order? (b) Suppose that instead of having surplus capacity to produce 9,000 more boxes. Gostkowski has surplus capacity to produce only 3,000 more boxes. What will be the effect on Gostkowski's income if it accepts the new order for 9,000 boxesStep by Step Solution
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