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QUESTION 1 $45 55 Lawrenceville Company produced and sold 50,000 units of product and is operating at 70% of plant capacity. Unit information about its
QUESTION 1 $45 55 Lawrenceville Company produced and sold 50,000 units of product and is operating at 70% of plant capacity. Unit information about its product is as follows: Sales price $70 Variable manufacturing cost Fixed manufacturing cost ($500,000 - 50,000) 10 Profit per unit The company received a proposal from a foreign company to buy 10,000 units of Lawrenceville Company's product for $50 per unit. This is a one-time only order and acceptance of this proposal will not affect the company's regular sales. The president of Lawrenceville Company is reluctant to accept the proposal because he is concerned that the company will lose money on the special order. Instructions: Answer each of the following questions. Round the answers to the nearest dollar. 1. What is the maximum capacity of the plant in units? 2. What is the incremental impact on net income of accepting the special order? 3. Should the company reject the order or accept the order? Type the word "Reject" or "Accept
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