Question: Blowing Sand Company has just received a one time offer to

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 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.
1. Should Blowing Sand accept the special order?
2. Calculate the increase or decrease in short-term profit from accepting the special order.

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  • CreatedFebruary 27, 2015
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