Question: Capellen Manufacturing Corporation produces and sells quality wooden wall clocks
Capellen Manufacturing Corporation produces and sells quality wooden wall clocks that are priced at $ 340 each. Capellen has just received a request for a special order for 1,500 clocks at a price of $ 215 each. The current unit cost to produce a clock is $ 210 (direct materials, $ 90; direct labor, $ 70; unit-related overhead, $ 50). Capellen has the capacity to produce the special order; however, four additional production runs will be required costing $ 1,500 each. Should the order be accepted? Why or why not?
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