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The Caldwell Company manufactures cappuccino makers. For the first eight months of 2017 the company reported the following operating results while operating at 80% of

The Caldwell Company manufactures cappuccino makers. For the first eight months of 2017 the company reported the following operating results while operating at 80% of plant capacity: Sales (500,000 units) $75,000,000 Cost of goods sold 45,000,000 Gross profit 30,000,000 Operating expenses 24,000,000 Net income $ 6,000,000 An analysis of costs and expenses reveals that variable cost of goods sold is $80 per unit and variable operating expenses are $30 per unit. In September, Caldwell Company receives a special order for 25,000 machines at $120 each from a major coffee shop franchise. Acceptance of the order would result in $10,000 of shipping costs but no increase in fixed expenses. Instructions (a) How do I make an incremental analysis for the special order. (b) Should Caldwell Company accept the special order? Justify your answer

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