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Monroe has received a special order for 10,000 units of its product at a special price of $15. The product normally sells for $20 and
Monroe has received a special order for 10,000 units of its product at a special price of $15. The product normally sells for $20 and has the following manufacturing costs:
Per Unit | |
Direct Materials | $ 6 |
Direct Labor | $ 3 |
Variable manufacturing overhead | $ 2 |
Fixed manufacturing overhead | $ 6 |
Unit cost | $ 17 |
Assume that Monroe has sufficient capacity to fill the order. If Monroe accepts the order, what effect will the order have on the company's short-term profit?
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