Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Triple AAA Print Shop provides copying services to the general public. They have capacity to produce 1 , 8 0 0 copies per hour, and

Triple AAA Print Shop provides copying services to the general public. They have capacity to produce 1,800 copies per hour, and are open 7 hours each day. Typically Triple AAA will make 10,000 copies per day and charges $0.14 a copy with variable costs of $0.05 per copy. One morning a customer brings in 5,000 pages to be copied, which need to be completed by the end of the day. The customer has offered to pay $0.11 per copy. Which of the following is the correct conclusion Triple AAA should reach?
A) The special order should be accepted as $84 will be added to operating income
B) The special order should not be accepted because Triple AAA does not have the capacity to meet the order
C) The special order should be accepted because the price being offered of $0.11 per copy is greater than the variable cost per unit of $0.05
D) The special order should not be accepted because it will lose contribution margin of $450 from its regular customers

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management And Cost Accounting

Authors: Charles T. Horngren, Alnoor Bhimani, Srikant M. Datar, George Foster

1st Edition

0130805475, 978-0130805478

More Books

Students also viewed these Accounting questions

Question

P(60 Answered: 1 week ago

Answered: 1 week ago