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PLEASE PROVIDE CALCULATIONS. THANK YOU! Problem 2: Accept additional business (10 pts) Parker Plumbing has received a special one-time order for 2,000 faucets (units) at
PLEASE PROVIDE CALCULATIONS. THANK YOU!
Problem 2: Accept additional business (10 pts) Parker Plumbing has received a special one-time order for 2,000 faucets (units) at $6 per unit. Parker currently produces and sells 9,000 units at $7.00 each. This level represents 75% of its capacity. Production costs for these units are $6.00 per unit, which includes $4.00 variable cost and $2.00 fixed cost. To produce the special order, a new machine needs to be purchased at a cost of $1,500 with a zero salvage value. Management expects no other changes in costs as a result of the additional production. Computations: Per Unit Total Revenue Relevant production costs: (# lines not necessarily #items) Total costs Net income (loss) from order Should the company accept the special order? ExplainStep by Step Solution
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