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Red Rose Manufacturers Inc. is approached by a potential new customer to fulfill a one-time-only special order for a product similar to one offered
Red Rose Manufacturers Inc. is approached by a potential new customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials Direct labor $170 110 Manufacturing support 125 Marketing costs 55 Fixed costs: Manufacturing support 185 Marketing costs 55 Total costs 700 Markup (45%) 315 Targeted selling price $1,015 What is the contribution margin per unit? A. $555 B. $315 C. $700 D. $240
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