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Nardin Outfitters has a capacity to produce 12,000 of their special arctic tents per year. The company is currently producing and selling 5,000 tents

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Nardin Outfitters has a capacity to produce 12,000 of their special arctic tents per year. The company is currently producing and selling 5,000 tents per year at a selling price of $900 per tent. The cost of producing and selling one tent follows: Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs Total costs $ 440 90 80 50 $ 660 The company has received a special order for 500 tents at a price of $600 per tent from Chipman Outdoor Center. It will not have to pay any sales commission on the special order, so the variable selling and administrative costs would be only $45 per tent. The special order would have no effect on total fixed costs. The company has rejected the offer based on the following computations: Selling price per case Variable manufacturing costs Fixed manufacturing costs Fixed selling and administrative costs Variable selling and administrative costs Net profit (loss) per case Required: $ 600 440 90 45 50 $ (25) a. What is the impact on profit for the year if Nardin Outfitters accepts the special order? b. Do you agree with the decision to reject the special order? Required A Required B What is the impact on profit for the year if Nardin Outfitters accepts the special order? (Enter your answers in thousands rounded to 1 decimal place. (i.e., 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.)

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