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IV. Jones Corp. currently sells 50,000 units to its normal customers, but it has a capacity to produce 60,000 units. Its product sells for $60
IV. Jones Corp. currently sells 50,000 units to its normal customers, but it has a capacity to produce 60,000 units. Its product sells for $60 per unit and the variable costs incurred in manufacturing and selling the product are as follows on a per unit basis: Direct materials - $12; Direct labor - $20; Sales commission - $4. A customer has proposed a special order to purchase 10,000 units at a special price of $45 per unit. If Jones accepts the order, the company would not have to pay its sales people their normal commission, but the company would incur a shipping cost of $7 per unit. Required: (1) If Jones accepts the special order, how would operating income is affected? (2) What is the minimum price per unit below which Jones should reject the order? (3) Assume that Jones is operating at full capacity. What is the minimum price per unit below which Jones should reject the order
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