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Rippey Corporation manufactures a single product with the following unit costs for 5,000 units: Direct materials $60 Direct labor 30 Factory overhead (30% variable) 90

Rippey Corporation manufactures a single product with the following unit costs for 5,000 units:

Direct materials $60

Direct labor 30

Factory overhead (30% variable) 90

Selling expenses (50% variable) 30

Administrative expenses (30% variable) 15

Total per unit $225

Recently, a company approached Rippey Corporation about buying 1,000 units for $200. Currently, the models are sold to dealers for $300. Rippeys capacity is sufficient to produce the extra 1,000 units. No additional selling expenses would be incurred on the special order.

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Should Rippey accept the special order if its goal is to maximize short-run profits? Justify your answer.

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