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Required: Prepare a differential cost analysis to show whether the company shoul. the proposed new business. 3. Acceptance of a special order. Pacific Palmer Company
Required: Prepare a differential cost analysis to show whether the company shoul. the proposed new business. 3. Acceptance of a special order. Pacific Palmer Company has been producl selling 10,000 units of its product per month, with the following total costs: CS CamScanner 669 The normal sales price is $15 and plant capacity is 18,000 units. The company has received an offer from a special customer who would like to buy exactly 5,000 units of Pacific Palmer's product for $9 per unit. Marketing and administrative expenses related to this special order would be $1,500. Required: (1) Present computations showing whether or not Pacific Palmer should accept this special order. (2) Determine the effect on the answer to requirement (1) if the plant capacity were only 13,000 units. (CGAAC adapted)
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