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The management team of Marigold Industries was evaluating its performance for the first half of the year. Production and sales of its fans were on
The management team of Marigold Industries was evaluating its performance for the first half of the year. Production and sales of its
fans were on budget at units to date, with the following income statement reflecting its income for the first half of the year.
Sales
$
Variable costs:
Fixed costs:
Orders for the second half of the year were coming in slower than what the company had been expecting. When a new customer
called and requested a special discount, the sales team listened.
a
Assume the customer requests units in the special order and offers $ per unit. Since the customer came directly to the
company, no variable selling cost will be incurred. How much better or worse off will Marigold Industries be if it accepts this
special order, assuming it has enough idle capacity for the order?
Marigold Industries would be
by $
by accepting this order.
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