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need help with 2 and 4 Southern Tool and Steel's traller building business is typically slower during the month of December and the company has
need help with 2 and 4
Southern Tool and Steel's traller building business is typically slower during the month of December and the company has excess capacity Meador Tool and Steel has approached Southern with an order if Southern will give Meador reduced pricing on the order. Currently, Southern expects to sell 5.000 trallers to its current customers at a price of $800 per trailer during the current fiscal year and the company's cost of producing and selling each trailer is as follows Variable manufacturing costs $400 per unit Variable selling and administrative costs $125 per unit Fixed costs $200 per unit Meador has asked if Southern would accept a special order for a quantity of 100 trailers at a reduced selling price of $600 per trailer. I Southern accepts the offer, the Company's variable manufacturing costs for this order would increase by 10% because of special design work but the company would not incur any variable selling and administrative costs or any additionat fixed costs for this order Should Southern accept the order? Variable costs PER UNIT ..... Multiple Choice remain the same regardless of the level of activity, Include most personnel costs and depreciation on machinery can always be vroced directly to the cost object Increase in total when the actual level of activity increases Step by Step Solution
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