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Stuart Company manufactures a personal computer designed for use in schools and markets it under its own label. Stuart has the capacity to produce 43,000
Stuart Company manufactures a personal computer designed for use in schools and markets it under its own label. Stuart has the capacity to produce 43,000 units a year but is currently producing and selling only 10,000 units a year. The computer's normal selling price is $1,750 per unit with no volume discounts. The unit-level costs of the computer's production are $590 for direct materials, $200 for direct labor, and $130 for indirect unit-level manufacturing costs. The total product- and facility-level costs incurred by Stuart during the year are expected to be $2,180,000 and $802,000, respectively. Assume that Stuart receives a special order to produce and sell 3,190 computers at $1,270 each. Required Calculate the contribution to profit from the special order. Should Stuart accept or reject the special order? Contribution to profit Should Stuart accept or reject the special order
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