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Munoz Company manufactures a personal computer designed for use in schools and markets it under its own label. Munoz has the capacity to produce 42,000
Munoz Company manufactures a personal computer designed for use in schools and markets it under its own label. Munoz has the capacity to produce 42,000 units a year but is currently producing and selling only 12,000 units a year. The computer's normal selling price is $1,720 per unit with no volume discounts. The unit-level costs of the computer's production are $580 for direct materials, $100 for direct labor, and $120 for indirect unit-level manufacturing costs. The total product- and facility-level costs incurred by Munoz during the year are expected to be $2,140,000 and $805,000, respectively. Assume that Munoz receives a special order to produce and sell 3,020 computers at $1,210 each. Required Calculate the contribution to profit from the special order. Should Munoz accept or reject the special order? Contribution to profit Should Munoz accept or reject the special order
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