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MAYAR Corporation produces XY product. The selling price for XY product is $250. MAYAR produces and sells 5,600 of XY per year. Cost data are
MAYAR Corporation produces XY product. The selling price for XY product is $250. MAYAR produces and sells 5,600 of XY per year. Cost data are as follows: $115 per unit Variable manufacturing Variable selling and administrative Fixed manufacturing Fixed selling and administrative $16 per unit $290,000 per year $150,000 per year A potential deal has come up for a one-time sale of 32 units at a special price of $120 per unit. The marketing manager states that the sale will not negatively impact the company's regular sales activities and will require the normal variable manufacturing costs and selling and administrative costs. The production manager states that there is plenty of excess capacity and the deal will not impact fixed costs. The controller points out, however, that because the expected increase in revenues are equal to the expected increase in costs to fill the order, the deal will not have any impact on the bottom line. Required: Prepare differential analysis to decide whether the company should accept the special order or not. Discuss you
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