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Kaeding Company produces and sells 60,000 boxes of specialty foods each year. Each box contains the same Kaeding normally charges $22 per box. A new

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Kaeding Company produces and sells 60,000 boxes of specialty foods each year. Each box contains the same Kaeding normally charges $22 per box. A new distributor has offered to purchase 6,000 boxes at a special price of assortment of food. The company has computed the following annual costs: $20 per box. Kaeding will incur additional packaging costs of $4 per box to complete this order. Cost Item Total Costs Requirements (a) Suppose Kaeding has surplus capacity to produce 6,000 more boxes. What will be the effect on Kaeding's Variable production costs $ 180,000 income if it accepts this order? Fixed production costs 440,000 (b) Suppose that instead of having surplus capacity to produce 6,000 more boxes, Kaeding has surplus capacity to produce only 2,500 more boxes. What will be the effect on Kaeding's income if it accepts the new order for Variable selling costs 300,000 6,000 boxes? Fixed selling and administrative costs 140,000 Total costs $ 1,060,000Total additional packaging costs Total incremental fixed costs Total incremental revenue Total incremental variable costs\fTotal additional packaging costs Total incremental fixed costs Total incremental revenue Total incremental variable costs Total opportunity cost

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