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The Award Plus Company manufactures windows. Its manufacturing plant has t company normally charges $150 per window. Cost information for the current ad (Click the
The Award Plus Company manufactures windows. Its manufacturing plant has t company normally charges $150 per window. Cost information for the current ad (Click the icon to view the cost information.) Cost information Award Plus has just received a special one-time-only order for 5,000 windows at $125 per window. Accepting the special order would not affect the company's regular business or its fixed costs. Award Plus makes windows for its existing customers in batch sizes of 50 windows ( 300 batches 50 windows per batch = 15,000 windows). The special order requires Award Plus to make the windows in 100 batches of 50 windows. 1. Should Award Plus accept this special order? Show your calculations. 2. Suppose plant capacity were only 17,500 windows instead of 20,000 windows each month. The special order must either be taken in full or be rejected completely. Should Award Plus accept the special order? Show your calculations. 3. As in requirement 1 , assume that monthly capacity is 20,000 windows. Award Plus is concerned that if it accepts the special order, its existing customers will immediately demand a price discount of $15 in the month in which the special order is being filled. They would argue that Award Plus's capacity costs are now being spread over more units and that existing customers should get the benefit of these lower costs. Should Award Plus accept the special order under these conditions? Show your calculations
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