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THE Company has the capacity to produce 61,000 units of the single product it manufactures. The per unit costs of this product when 61,000 units
THE Company has the capacity to produce 61,000 units of the single product it manufactures. The per unit costs of this product when 61,000 units are produced are given below: direct materials $14.30 direct labor 11.70 variable overhead 3.89 fixed overhead 5.20 variable selling costs 2.60 fixed selling costs 1.50 The normal selling price of the product is $65.30 per unit. THE Company is currently selling 57,600 units of this product to regular customers. THE Company has just obtained a request for a special order of 7,000 units to be shipped at the end of the current month at a discounted price of $43.45 per unit. The variable selling costs would only be $2.10 per unit on the special order. Calculate the amount of the decrease in company profits if THE Company accepts the special order. Do not put a minus sign in front of your
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