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Problem 2 Dapper Dan produces a man's suit that sells for $200. Although the company's production capacity is 3,000 suits per year, only 2,500 suits
Problem 2 Dapper Dan produces a man's suit that sells for $200. Although the company's production capacity is 3,000 suits per year, only 2,500 suits are currently being produced and sold. At this level of production, the company incurs the following costs: $80 Unit-level material cost per suit Unit-level labor cost per suit Unit-level overhead per suit Batch-level set-up cost for each batch of 500 suits Annual product-level costs Allocated facility-level costs $40 $20 $1,200 $ 15,000 $ 50,000 Easton Clothiers has offered to purchase 500 suits as a one-time special purchase at a price of $135. Required: a) Prepare a quantitative analysis, and calculate the additional income if the special order should accepted. Enter the amount of additional income or loss if the special order is accepted (Do not use a dollar sign). b) True or False: The special order should be should be accepted. On the answer sheet, enter T if true or F if false
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