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Calculate the business impact of accepting a special order

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A customer has offered to buy a special order of 100 units of D for $60 each. This sale will not impact any other part of your business and you have excess capacity to produce this special order and will produce these extra units if you accept the order. How would this impact the business - would you be better off and by how much? Would you need other information to answer this question and, if so, what other information?

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The solution guides through the theory and the computation.

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You would be better off by $60 less the incremental cost of producing the units. So, you would need to know what extra costs you would incur to make these - direct ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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