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Part 2 contains 3 Decision making recommendations that are independent of each other worth 2 pts. Each for a total of 6 pts. Covers material
Part 2 contains 3 Decision making recommendations that are independent of each other worth 2 pts. Each for a total of 6 pts. Covers material in Module 17 | |||||||
Decision Making #1-Special Order | |||||||
Snider, Inc., which has excess capacity, received a special order for 2,000 units at a price of $15 per unit which it could produce with the excess capacity. | |||||||
Currently, production and sales are anticipated to be 10,000 units without considering the special order. Budget information for the current year sales of 10,000 units follows. | |||||||
Sales | $200,000 | ||||||
Less: cost of goods sold | 150,000 | ||||||
Gross Margin | $50,000 | ||||||
Cost of goods sold includes $25,000 of fixed manufacturing cost. | |||||||
Required: | |||||||
If the special order is accepted, calculate how much the company's gross margin will change. Make sure you show your work and explain if you would | |||||||
accept or not accept this special order and why? | |||||||
Recommendation: |
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