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Please help with this one Batting Corporation produces baseball bats for kids that it sells for $35 each. At capacity, the company can produce 40,000
Please help with this one
Batting Corporation produces baseball bats for kids that it sells for $35 each. At capacity, the company can produce 40,000 bats a year. The costs of producing and selling 40,000 bats are as follows: (Click to view the costs.) Read the requirements. Requirement 1. Suppose Batting is currently producing and selling 34,000 bats. At this level of production and sales, its fixed costs are the same as given in the preceding table. Mantle Corporation wants to place a one-time special order for 6,000 bats at $23 each. Batting will incur no variable selling costs for this special order. Should Batting accept this one-time special order? Show your calculations. Determine the effect on operating income if the order is accepted. (Enter decreases in operating income with parentheses or a minus sign.) Increase (decrease) in operating income if order is accepted Batting should Mantle's special order because it ]operating income by $ Requirements 1. Suppose Batting is currently producing and selling 34,000 bats. At this level of production and sales, its fixed costs are the same as given in the preceding table. Mantle Corporation wants to place a one-time special order for 6,000 bats at $23 each. Batting will incur no variable selling costs for this special order. Should Batting accept this one-time special order? Show your calculations. 2. Now suppose Batting is currently producing and selling 40,000 bats. If Batting accepts Mantle's offer it will have to sell 6,000 fewer bats to its regular customers. (a) On financial considerations alone, should Batting accept this one-time special order? Show your calculations. (b) On financial considerations alone, at what price would Batting be indifferent between accepting the special order and continuing to sell to its regular customers at $35 per bat? (c) What other factors should Batting consider in deciding whether to accept the one-time special order? Data tableStep by Step Solution
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