Question
Vincennes Co. receives an order for one of its products. The order demands a 10% discount from the standard price, but would be for a
Vincennes Co. receives an order for one of its products. The order demands a 10% discount from the standard price, but would be for a sizable volume: 10,000 units. Vincennes typically sells the product for $20 per unit and incurs production costs of $400,000 fixed and $700,000 variable for the 80,000 units it produces in an average month. In addition, Vincennes incurs $1,200,000 in fixed marketing and administration costs. Vincennes factory is currently operating at full capacity. Should Vincennes accept the special order? Provide proof of your answer.
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