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Specal-Order Decision The Cool Can Company manufactures drink koozles and has been approached by a new customer with an offer to purchase 15,000 units at
Specal-Order Decision The Cool Can Company manufactures drink koozles and has been approached by a new customer with an offer to purchase 15,000 units at a per-unit price of $8.00. The nen customer is geographically separated from Cool Can's other customers, and existing sales will not be affected. Cool Can normally produces 96,000 units but plans to produce and seli only 65,000 in the coming vear, The normal soles price is $16 per unit, Unit cost information is as follaws: Direct materials. Direct labor Variable overhead Fixed ovehead Tota 53.10 2.75 1.25 1.80 58.90 In addition, assume that the new customer ako wants to have its company logo affixed to each koozie using a label, Cool Can would have to purchase a special logo labeling machine that will cost \$12,000. The machine will be able to label the 15,000 units and then it will be scrapped (with no further value). No other fixed overhead activest will be incurred. In addidion, each specal logo requires addional direct materis of $0.20. Conceptual Connection: should Cod Can accept the special order? By how much will operating income increase or decrease if the order is accepted? If your answer is decrease, enter negative value
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