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Question 2: Hala Company manufactures ovens. For the first 10 months of 2020, the company reported the following operating results while operating at 75% of
Question 2: Hala Company manufactures ovens. For the first 10 months of 2020, the company reported the following operating results while operating at 75% of plant capacity: Sales (35,000 units) Cost of goods sold Gross profit Operating expenses Net income $4,375,000 2,600,000 1,775,000 840,000 $ 935,000 Cost of goods sold was 80% variable and 20% fixed; operating expenses were 60% variable and 40% fixed. In November, Hala receives a special order for 12,000 ovens at $110 each from Basheer Company Acceptance of the order would result in a SI shipping costs for each additional unit produced and an increase in all fixed costs by 2% Instructions a. Prepare an incremental analysis for the special order. b. Should Hala accept the special order? Why or why not
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