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Melissa looked through recent orders and found five that seemed representative of those received during the past year (see Exhibit 2). The orders all involved

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Melissa looked through recent orders and found five that seemed representative of those received during the past year (see Exhibit 2). The orders all involved cartons containing merchandise costing about $500 to acquire from manufacturers to which the normal 22% markup had been realized. Orders requiring direct delivery had an additional 45% surcharge. While each of these orders had been priced in the standard way for cost recovery and profit margins, Melissa wondered what profits Midwest Office Products had really earned on each of these orders. Order 2 3 5 $634 $610 500 500 $6,340 5,000 10 $6,100 5,000 10 10 $6,100 5,000 10 1 1 Price Acquisition cost No, cartons in order No. cartons shipped commercially Desktop dollvery time (hours) Manual order No line items in order Electronic order Payment period (months) 1 0 0 10 4 - 4 no yes no 1 1 yos 10 10 yos 10 yes no no 1 yos 1 no 4 4 4

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