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Question 2 (25 marks) a) Apples Galore Limited manufactures apple juice with the following costs per unit at the expected production of 50,000 units
Question 2 (25 marks) a) Apples Galore Limited manufactures apple juice with the following costs per unit at the expected production of 50,000 units per month: Direct materials $20 $15 Direct labor Variable manufacturing overhead $12 The fixed manufacturing overhead are estimated to be $1,100,000 and the company has the capacity to produce 70,000 units per month. Each apple juice regularly sells for $80.00. Due to the pandemic, business has slowed down for Apples Galore Limited and in the midst of this, a wholesaler has offered to pay $70.00 each for 6,000 units. Required: Using the total project approach, should Apples Galore Limited accept the special order? Explain why or not. (15 marks)
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