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Jasper Company produces widgets that it sells for $62 each, and Joe Jasper, the owner, is contemplating several ideas to grow his business. He
Jasper Company produces widgets that it sells for $62 each, and Joe Jasper, the owner, is contemplating several ideas to grow his business. He has brought his monthly operating budget to you and has asked you to analyze it for him. (See BUDGET page in accompanying EXCEL spreadsheet.) Each unit requires 1/2 hour of machine time and direct labor. Assembly workers are paid $20 per hour. The machinery is serviced on a regular schedule based on the number of hours each machine runs. Case Problems Lasko Industries has offered the company $48 for 500 units one month. If the company accepts this offer, it will not have to pay sales commissions. The company's capacity is 12,000 units each month, so it will not have to add an additional shift. a. Should the company accept the offer? Provide computations. b. What are some of the qualitative issues management should consider in making this decision?
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