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Li Company produces a product that sells for $92 per unit. A customer contacts Li and offers to purchase 2,800 units of its product
Li Company produces a product that sells for $92 per unit. A customer contacts Li and offers to purchase 2,800 units of its product at a price of $84 per unit. Variable production costs with this order would be $34 per unit, and variable selling expenses would be $22 per unit. Assume that this special order would not require any additional fixed costs, and that Li has sufficient capacity to produce the product without affecting regular sales. Should Li accept this special order?
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