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Solomon Company manufactures a personal computer designed for use in schools and markets it under its own label. Solomon has the capacity to produce 34,000
Solomon Company manufactures a personal computer designed for use in schools and markets it under its own label. Solomon has the capacity to produce 34,000 units a year but is currently producing and selling only 15,000 units a year. The computer's normal selling price is $1,630 per unit with no volume discounts. The unit-level costs of the computer's production are $530 for direct materials, $130 for direct labor, and $150 for indirect unit-level manufacturing costs. The total product- and facility-level costs incurred by Solomon during the year are expected to be $2,190,000 and $806,000, respectively. Assume that Solomon receives a special order to produce and sell 3,190 computers at $1,280 each. Required Calculate the contribution to profit from the special order. Should Solomon accept or reject the special order? Contribution to profit Should Solomon accept or reject the special order
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