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The Varone Company makes a single product called a Horn The company has the capacity to produce 40,000 Horns per year. Per unit costs to
The Varone Company makes a single product called a Horn The company has the capacity to produce 40,000 Horns per year. Per unit costs to produce and sell one Horn at that activity level are. The regular selling price for one Horn is $90 A special order has been received at Varone from the Fairview Company to purchase 6, 700 Horns next year at 20% off the regular selling price If this special order were accepted, the variable selling expense would be reduced by 30% However, Varone would have to purchase a specialized machine to engrave the Fairview name on each Horn in the special order This machine would cost $12, 700 and it would have no use after the special order was filled The total fixed costs, both manufacturing and selling, are constant within the relevant range of 30,000 to 40.000 Horns per year Assume direct labor is a variable cost. if Varone can expect to sell 30.000 Horns next year through regular channels, at what special order price per unit from Fairview should Varone be economically indifferent between either accepting or not accepting this special order? $64.9 $77.7 $72.0 $55.0
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