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Walton Company manufactures a personal computer designed for use in schools and markets it under its own label. Walton has the capacity to produce 2
Walton Company manufactures a personal computer designed for use
in schools and markets it under its own label. Walton has the
capacity to produce units a year but is currently producing
and selling only units a year. The computers normal selling
price is $ per unit with no volume discounts. The unitlevel
costs of the computers production are $ for direct materials,
$ for direct labor, and $ for indirect unitlevel
manufacturing costs. The total product and facilitylevel costs
incurred by Walton during the year are expected to be $
and $ respectively. Assume that Walton receives a special
order to produce and sell computers at $ each.RequiredCalculate the contribution to profit from the special order.
Should Walton accept or reject the special order?
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