(Solved):Sedona Corporation has an annual plant capacity of 2, 800 product units. Its predicted operations…

 

Question

Sedona Corporation has an annual plant capacity of 2, 800 product units. Its predicted operations for the year are:

– Sales, 2,000 units at $38 each $76,000

Manufacturing costs:

– Variable $25 per unit

– Fixed $8,000

Marketing and administrative costs:

– Variable (sales commissions) $6 per unit

– Fixed $2,000

Required: Should the company accept a one-time-only special order for 600 units at a selling price of $32 each and subject to half the usual sales commission

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