Blowing Sand Company has just received a one-time offer to purchase 10,000 units of its Gusty model for a price of $22 each. The Gusty model normally sells for $30 and costs $26 to produce ($17 in variable costs and $9 of fixed overhead). Because the offer came during a slow production month, Blowing Sand has enough excess capacity to accept the order.
Required:
a. Should Blowing Sand accept the special order?
b. Calculate the increase or decrease in short-term profit from accepting the special order.
Answers: 3
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Blowing Sand Company has just received a one-time offer to purchase 10,000 units of its Gusty model...
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