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The PQR Company has 20,000 units of production capacity. It is currently producing and selling 19,000 units of its product, Pidgets, a robotic pidgeon. Pidgets
The PQR Company has 20,000 units of production capacity. It is currently producing and selling 19,000 units of its product, Pidgets, a robotic pidgeon. Pidgets sell for $17 per unit, and have a unit variable cost of $7. PQR's fixed costs total $30,000. A potential customer has approached PQR desiring 2,000 units of a modification of the Pidget, to be called Ridgeons. The company has offered PQR $14 per Ridgeon. The unit variable cost of the Ridgeon is expected to be $8. If PQR accepts the special order, the effect on income will be: A.$10,000 decrease B. C. $2,000 increase D. $12,000 increase $4,000 decrease
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