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Problem: Module 6 Textbook Problem 3 Learning Objective: 6-2 Make appropriate special order decisions Campbell Company manufactures a personal computer designed for use in
Problem: Module 6 Textbook Problem 3 Learning Objective: 6-2 Make appropriate special order decisions Campbell Company manufactures a personal computer designed for use in schools and markets it under its own label. Campbell has the capacity to produce 39,000 units a year but is currently producing and selling only 18,000 units a year. The computer's normal selling price is $1,730 per unit with no volume discounts. The unit-level costs of the computer's production are $480 for direct materials, $180 for direct labor, and $190 for indirect unit-level manufacturing costs. The total product- and facility-level costs incurred by Campbell during the year are expected to be $2,200,000 and $814,000, respectively. Assume that Campbell receives a special order to produce and sell 3,110 computers at $1,230 each. Required Calculate the contribution to profit from the special order. Should Campbell accept or reject the special order? Contribution to profit Should Campbell accept or reject the special order?
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