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Jupiter Corporation manufactures skateboards. Several weeks ago, the firm received a speciaforder inquiry from Venus: incorporated. Venus desires to market a skateboard similar to one

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Jupiter Corporation manufactures skateboards. Several weeks ago, the firm received a speciaforder inquiry from Venus: incorporated. Venus desires to market a skateboard similar to one of Jupiter's and has offered to purchase 11,000 units it the order can be completed in three months. The cost data for Jupiter's model number 43 skateboard follow Additional data - The normal selling price of model number 43 is $26.50, howevet Venus has offered Jupiter only $1575 because of the large quantity it is willing to purchase - Venus requires a modification of the design that will allow a $2.10 rectuction in direct-moterial cost - Jupiter's production supervisor notes that the company wili incur $3,700 in additional setup costs and wall have to purchase a $2,400 special device to manufacture these units. The device will be discarded once the special order is: completed - Total manufocturing overhead costs are applied to production at the rate of $20 per machine hout This figure is based in part, on budgeted yearly fixed overhead of $750.000 and planned production activity of 60.000 machine hours (5.000 per month) - Jupiter will ailocate $1,800 of existing fixed administrative costs to the order as *- part of the cost of doing busmess: PR 14-45 (Static) Part 1: Calculate the net profit increase or (decrease) from accepting the special order. Required: 1-a. Calculate the net profit increase or (decrease) from accepting the special ordec 1.b. Assume that present sales will not be affected. Should the order be accepted from a financial point of view (ie. is it profitable)

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