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    Collegiate Products produces and sells padded stadium seats

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    Collegiate Products produces and sells padded stadium seats emblazoned with a university logo. The company has the capacity to produce as many as 6,000 seats per month but consistently averages much less. When 4,500 seats are produced, each seat has $5 of variable costs and $2 of fixed overhead costs allocated to it. The seats typically sell for $25 each. The company has been approached by a small college who wishes to purchase 500 seats for special alumni at a price of $5 per seat.

    If the special order weres accepted, net income would be?

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    Collegiate Products produces and sells padded stadium seats emblazoned with a university logo. The company has the capacity to produce as many as 6,000 seats per month but ...

    Solution Summary

    Collegiate Products produces and sells padded stadium seats emblazoned with a university logo. The company has the capacity to produce as many as 6,000 seats per month but consistently averages much less. When 4,500 seats are produced, each seat has $5 of variable costs and $2 of fixed overhead costs allocated to it. The seats typically sell for $25 each. The company has been approached by a small college who wishes to purchase 500 seats for special alumni at a price of $5 per seat.

    If the special order weres accepted, net income would be?

    $2.19

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