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Q 1.92: Kimball Company is considering filling a special order for Reynolds Corporation. Kimball currently produces and sells 50,000 annual units of its product for
Q 1.92: Kimball Company is considering filling a special order for Reynolds Corporation. Kimball currently produces and sells 50,000 annual units of its product for $8.00 each with variable manufacturing costs of $5.60 per unit. Reynolds, a preferred customer, wants to purchase 5,000 units for $7.00 each. While variable manufacturing costs will remain constant, an additional $10,000 will be required to complete the special order. Using incremental analysis, what is the profit or loss to Kimball when analyzing the decision to fulfill the order? A $1,400 loss B $3,000 loss $3,000 profit D $7,000 profit
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