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Snider, Inc., which has excess capacity, received a special order for 3,000 units at a price of $14 per unit which it could produce with
Snider, Inc., which has excess capacity, received a special order for 3,000 units at a price of $14 per unit which it could produce with the excess capacity. Currently, production and sales are anticipated to be 10,000 units without considering the special order. Cost of goods sold includes $30,000 of fixed manufacturing cost. Below is budget information for the current year sales of 10,000 units follows. Sales $200,000 Less: cost of goods sold 150,000 Gross Margin $50,000
If the special order is accepted, calculate the specific change in income for only the special order. Make sure you show your work | |||||
Provide a recommendation to management if the company should accept or reject this special order. Explain in detail your recommendation to management. | |||||
Recommendation with calculations and impact to income of special order: | |||||
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