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How do you work this problem Wok Around the Clock, Inc., sells specialty woks. In the current year it expects to incur $840,000 in x
How do you work this problem
Wok Around the Clock, Inc., sells specialty woks. In the current year it expects to incur $840,000 in x variable costs and $130,000 in fixed costs to make and sell 10,000 woks at $100 each. If Wok Around the clock accepts a special order from Hard Wok Cafe to purchase 1,000 woks at $80 each, how much would it make or lose on this special order? ENTER A LOSS WITH A "-"SIGN. DO NOT USE PARENTHESES. EXAMPLE: -1,000 Selected Answer: [None Given) Correct Answer: -4,000 Response See L04 in Management Decision Making Feedback: The fixed costs are irrelevant since the costs will not change if the company decides to accept the special order. Thus, the special price should be compared to the relevant incremental costs only the costs that will increase if the order is accepted), not the total cost Step by Step Solution
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