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ne of the products (Product 1TL} manufactured by Weslong Corp. [Weslongi has the following cost per unit: Direct materials $12 Direct labour [1 hour} 25
ne of the products (Product 1TL} manufactured by Weslong Corp. [Weslongi has the following cost per unit: Direct materials $12 Direct labour [1 hour} 25 Dyerhead {1 hour] Fixed oyerhead allocated to Product 1TL is $25, per year and is based on Weslong's estimated production capacity of 1, hours. Current production and sales of Product 1TL are 8, units per year. The current price for Product 1TL is $133 per unit. 1il'ii'eslong was approached by a potential customer who wants to place a special order for 4,D units of a product that would he very similar to Product 1?L_ The special order would be produced in the same facility as Product 1TL. The only difference is that the specialorder product would require only (1.?5 direct labour hours per unit. The potential customer has offered a price of $33 per unit. If the special order is accepted, 1ll'ii'eslong would incur a onetime setup cost of $1 B. Required: a} Calculate the incremental income to Weslong if the special order is accepted. [5 marks] h} Recommend whether WESIGHQ should accept the special orderr and explain why or why not. [1 mark}
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