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Swisser Vase Company manufactures and sells vases. Great Products Company has offered Swisser Vase $16 per vase for 5,000 vases. Swisser Vase's normal selling price
Swisser Vase Company manufactures and sells vases. Great Products Company has offered Swisser Vase $16 per vase for 5,000 vases. Swisser Vase's normal selling price is $28 per vase. The total manufacturing cost per vase is $18 and consists of variable costs of $14 per vase and fixed overhead costs of $4 per vase. (NOTE: Assume excess capacity and no effect on regular sales.) Should Swisser Vase accept or reject the special sales order?
O A. Reject, because operating income would decrease $70,000. C B. Accept, because operating income would increase $10,000 O C. Accept, because operating income would increase $150,000. O D. Reject, because operating income would decrease $10,000Step by Step Solution
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