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When Anthony received a special-order request from Noah, he initially turned it down because the bid price of $14 per unit was only half
When Anthony received a special-order request from Noah, he initially turned it down because the bid price of $14 per unit was only half of his usual selling price. It was also lower than his product costs (unknown to Noah): Manufacturing cost per unit $10 (includes $2 of fixed-MOH) Selling and administrative costs per unit $4 (all variable-MOH) If Anthony has enough capacity to take on this special order, did he make a good decision to pass on this deal, or did he make a mistake? Explain. Special-order selling price $ 14 per unit Total relevant costs $ 14 per unit The quantitative analysis suggests that Anthony should have accepted the special order. The incremental benefits are larger than the incremental costs by $ 0 per unit. eTextbook and Media eTextbook Assistance Used
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