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When deciding whether to accept a special order, we should compare the extra revenues we will receive against the extra costs we will incur to
When deciding whether to accept a special order, we should compare the extra revenues we will receive against the extra costs we will incur to fill the order . Costs that we will incur whether or not we fill the order are irrelevant to our decision. This is why comparing the $ 78 price Master Glasses offered us with our $ 88 total cost of making and selling the sunglasses is misleading . Part 4 Specifically, we have enough capacity to produce the 20,000 extra pairs of sunglasses for Master Glasses' special order without increasing our fixed costs . Our fixed costs will remain the same whether or not we accept the order, so these costs are irrelevant . Also, as you know, we will not incur any variable marketing expenses on the special order. These costs will be the same whether or not we make the additional 20,000 pairs of sunglasses for Master Glasses, so these costs are irrelevant . Part 5 The extra to fill the special order are irrelevant relevant . If we accept Master Glasses' special order, we will incur $ enter your response here extra cost per pair of sunglasses. Therefore, we should accept reject the special order from Master Glasses
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