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York Ltd. produces a high quality fidget spinner for kids that it sells for $40 each. At capacity, York Ltd can produce 50,000 spinners a
York Ltd. produces a high quality fidget spinner for kids that it sells for $40 each. At capacity, York Ltd can produce 50,000 spinners a year although York Ltd. is currently producing and selling 40,000 spinners. The costs of producing and selling 50,000 spinners are as follows Total costs $750,000 250,000 100,000 300,000 150,000 100,000 $1,650,000 t per unit $15 Direct materials Direct manufacturing labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total costs S33 Required (a) New Ltd. wants to place a one-time special order for 10,000 spinners at $30 each. York Ltd. will incur no variable selling costs for this special order. Should York Ltd. accept this one-time special order? Show your calculations. (b)If York Ltd. is currently producing and selling 45,000 spinners, on financial consideration alone should York Ltd. accept this one-time special order on 10,000 units? Describe and briefly discuss other factors that York Ltd. should consider in deciding whether to accept the one-time special order (c)
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