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Roxo, Inc. makes clocks. The company has the capacity to make 5,000 clocks, and its current volume is 3,000 clocks. The costs of a clock
Roxo, Inc. makes clocks. The company has the capacity to make 5,000 clocks, and its current volume is 3,000 clocks. The costs of a clock are: $300 for unit-level materials, $200 for unit-level labor, and $150 for an allocation of facility-level overhead. The normal selling price is $950. Olaf has received a special order for 600 clocks at a price of $600 each Required: Should Olaf accept the special order? Support your answer with appropriate computations of the differential revenue, avoidable costs, and contribution to profit/(loss) if the special order is accepted. A. Differential revenue B. Avoidable costs: C. Contribution to profit: D. Should the special order be accepted
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