Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable production cost is $5.00 per unit. An additional export tariff of 15% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order.
Required:
a. Prepare a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order.
b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?
Answers: 1
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Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export ma...
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