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Special Order, Traditional Analysis Fiorello company manufactures two types of cold-pressed olive ol, Refined Oil and Top Quality Oil, out of a joint process. The

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Special Order, Traditional Analysis Fiorello company manufactures two types of cold-pressed olive ol, Refined Oil and Top Quality Oil, out of a joint process. The joint (common) costs incurred are $87,900 for a standard production run that generates 30,200 gallons of Refined Oil and 15,100 galions of Top Quality Oit, Additional processing costs beyond the split-off point are $2.40 per gallon for Refined Oa and $2.10 per gallon for Top Quality Oil. Refined Oil sells for $4.35 per galion, while Top Quality Oil selis for $8.60 per gallon. ManglareBuono, a supermarket chain, has asked Fiorello to supply it with 30,200 gallons of Top Quality Oil at a price of $8.4 per gallon. ManglareBuono plans to have the oll bottied in 16-ounce bottles with its own Mangiarebuono label. If Florelle accepts the order, it well save $0.23 per gallon in packeging of Top Quality Oil. There is sutficient excess capacity for the order. However, the market for Refined OIf is saturated, and any additional sales of Reflned Oil would take place at a price of \$3.12 per gollon, Assume that no significant non-ublelevel activity costs are incurred. Required: 1. What is the profit normally earned on one production run of Refined Oll and Top Quality Oil? 4 2. Should Fiorello accept the special erder

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