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Kolar Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Kolar
Kolar Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Kolar Manufacturing has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials $80 Direct labor 40 Manufacturing support 70 Marketing costs 30 fixed costs: Manufacturing support 90. Marketing costs. 30. Total costs 340. Targeted selling price. $510 What is the change in the operating profits if the one-time special order for 1,000 units is accepted for $360 a unit by Kofar? a. $150,000 decrease in operating profits b. $20,000 increase in operating profits. c. $20,000 decrease in operating profits. d. $140,000 increase in operating profits
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