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The Butler Corp. has the capacity to produce 10,000 units per year. Its predicted operations for the year are as follows: The accounting department has
The Butler Corp. has the capacity to produce 10,000 units per year. Its predicted operations for the year are as follows: The accounting department has prepared the following projected income statement for the coming year for your use in making decisions. Required a) Should the company accept a special order for 1,000 units at a selling price of $12 ? Assuming that there are no variable marketing and administrative costs for this order and that regular sales will not be affected, what is the impact of this decision on company profits? b) Suppose there was a one-time setup fee of $5,000 for the preceding order. Should the special order be accepted? Why? c) What other factors should be considered and how would they impact your decision to accept the special order
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