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Need help finding endorse fee, increment cost, & price per cup. Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed
Need help finding endorse fee, increment cost, & price per cup.
Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high-profile celebrity and designed with special elements selected by the celebrity. During recent year, Camino Company had the following operating results while operating at 75 percent (67,500 units) of its capacity: Camino's cost of goods sold and operating expenses are 80 percent variable and 20 percent fixed. Camino has received an offer from a professional wrestling association to design a coffee cup by its biggest star and produce 18,000 cups for $10 each (total $180,000). These cups would be sold at wrestling matches throughout the United States. Acceptance of the order would require a endorsement fee to the wrestling star, but no other increases in fixed operating expenses. Required: 1. Complete the incremental analysis of the special order in the table provided below. (Enter per unit answers to 2 decimal places.) Should Camino accept this special order? Yes No If Camino were operating at full capacity, what price would Camino require for the special order? Price per Cup ____Step by Step Solution
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