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We've got a special order for 10,000 units from XYZ Inc. said Harry Hope, CEO of Widgets R Us (WRU). If we get this order,

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"We've got a special order for 10,000 units from XYZ Inc." said Harry Hope, CEO of Widgets R Us (WRU). If we get this order, this can mean a lot of future business from this customer in the future. WRU has extra capacity and accepting this deal will not impact sales from their current customer base. - XYZ is only willing to pay $10 per unit. If overhead costs are overapplied, WRU may lose out on a profitable deal. At the start of the year, XYZ's Fixed Manufacturing Overhead was estimated at $100,000 for the year, based on capacities of 40,000 machine hours and 50,000 direct labour hours. The variable costs for this order - including variable overhead, amount to $6 per unit. Each unit requires 2 machine hours and 1 labour hour to produce. Required 1. Determine what the manufacturing costs would be if machine hours are 2. Determine what the manufacturing costs would be if direct labor hours 3. Determine which overhead allocation basis would result in the best 4. Should WRU accept this special order from XYZ? Make sure you state used as the allocation base. + are used as the allocation base decision for WRU. Support your decision. + why or why not

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