differential analysis

Project Description:

gooding foods makes goody-goody brand peanut butter. the cost to make each jar is $2.05 and consists of the following:
direct materials $1.00
direct labor 0.25
variable factory overhead 0.30
fixed factory overhead 0.50
a grocery store chain wants to purchase a generic brand peanut butter from gooding and is willing to pay $1.50 per jar. the generic peanut butter will be made using a different recipe, lowering the direct materials cost to $0.80 per jar. gooding can produce this special order using excess capacity; therefore, fixed costs will not increase. use differential analysis to determine whether gooding should accept this special order.
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Project Stats:

Price Type: Negotiable

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