Antiquities, Ltd., produces antique-looking books. Management has just received a request for a special order for 1,000

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Antiquities, Ltd., produces antique-looking books. Management has just received a request for a special order for 1,000 books and must decide whether to accept it. Venus Company, the purchaser, is offering to pay $25.00 per book, which includes $3.00 per book for shipping costs. The variable production costs per book include $9.20 for direct materials, $4.00 for direct labor, and $3.80 for variable overhead. The current year’s production is 20,000 books, and maximum capacity is 25,000 books. Fixed costs, including overhead, advertising, and selling and administrative costs, total $70,000. The usual selling price is $25.00 per book. Shipping costs, which are additional, average $3.00 per book. Determine whether Antiquities should accept the special order.

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Managerial Accounting

ISBN: 978-0618777181

8th Edition

Authors: Susan V. Crosson, Belverd E. Needles

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