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(i) Special Order Decision Missoula Industries manufactures a product with the following costs per unit at the expected production of 30,000 units: Direct materials $5
(i)Special Order Decision
Missoula Industries manufactures a product with the following costs per unit at the expected production of 30,000 units:
Direct materials $5
Direct labor 15
Variable manufacturing overhead 8
Fixed manufacturing overhead 6
The company has the capacity to produce 60,000 units. The product regularly sells for $45. A wholesaler has offered to pay $40 each for 2,000 units.
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Based on your analysis, advise management whether to accept or reject the special order.
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