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MC Alexander Industries makes tennis balls. Its only plant can produce as many as 2,500,000 cans of tennis balls per year. Current production is 2,000,000

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MC Alexander Industries makes tennis balls. Its only plant can produce as many as 2,500,000 cans of tennis balls per year. Current production is 2,000,000 cans. Annual manufacturing, sling, and administrative fixed costs total $700,000. The variable cost of making and selling cach can of tennis balls is $1.00. Stockholders expect a 1200 annual rcturn on the company's $3,000,000 of asscts. Requirements Nelson, Inc. has just asked MC Alexander to supply the company with 400,000 cans of tennis balls at a spccial order pricc of $1.20 per can. Nelson wants MC Alexander to package the tennis balls under the Nelson label (MC Alexander will imprint the Nelson logo on each tennis ball and can). MC Alexander will have to spend $10,000 to change the packaging machinery. Assuming the original volume and costs, should MC Alexander accept this special order? (Assume MC Alexander will incur variable selling costs as well as variable manufacturing costs related to this order) (See Learning

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