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Company A calculates the cost per unit of its product at $ 28 (with $ 18 variable cost & $ 10 fixed cost). The product sells for $ 42. If then there is a large trader who intends to buy 5000 units but at a price of $ 25 with an additional shipping cost of $ 1, then should Company A accept the order (Assume that the order does not interfere with regular orders)? what is the increase/decrease in net profit of company A? O $125,000 O $140,000 O $95.000 O $30,000

Company A calculates the cost per unit of its product at $ 28 (with $ 18 variable cost & $ 10 fixed cost). The product sells for $ 42. If then there is a large trader who intends to buy 5000 units but at a price of $ 25 with an additional shipping cost of $ 1, then should Company A accept the order (Assume that the order does not interfere with regular orders)? what is the increase/decrease in net profit of company A? O $125,000 O $140,000 O $95.000 O $30,000

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter8: Tactical Decision-making And Relevant Analysis
Section: Chapter Questions
Problem 11MCQ: Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett...
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Company A calculates the cost per unit of its product at $ 28 (with $ 18 variable cost & $ 10 fixed cost). The product sells for $ 42. If then there is a large trader who intends to buy 5000 units but at a price of $ 25 with an additional shipping cost of $ 1, then should Company A accept the order (Assume that the order does not interfere with regular orders)? what is the increase/decrease in net profit of company A? O $125.000 O $140,000 O $95.000 O $30,000
Transcribed Image Text:Company A calculates the cost per unit of its product at $ 28 (with $ 18 variable cost & $ 10 fixed cost). The product sells for $ 42. If then there is a large trader who intends to buy 5000 units but at a price of $ 25 with an additional shipping cost of $ 1, then should Company A accept the order (Assume that the order does not interfere with regular orders)? what is the increase/decrease in net profit of company A? O $125.000 O $140,000 O $95.000 O $30,000
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