A customer seeking a special order has approached RT. The customer wants an order of 150,000...

 

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A customer seeking a special order has approached RT. The customer wants an order of 150,000 retractors in 2017. The company would avoid packaging costs for this contract, as well as all variable selling costs. The customer is willing to reimburse the company for all production costs associated with the contract (including its share of fixed manufacturing overhead based on the proportion of the company's production volume that the customer's units require) and allow an additional $50,000 for profit. Assume that (1) the company does not adopt either strategic alternative for 2017, (2) the sales and production volumes will be the same as in 2016, and (3) the indirect labor costs are variable, as shown in Appendix A. What is the additional income that the company would earn from this special order contract? A customer seeking a special order has approached RT. The customer wants an order of 150,000 retractors in 2017. The company would avoid packaging costs for this contract, as well as all variable selling costs. The customer is willing to reimburse the company for all production costs associated with the contract (including its share of fixed manufacturing overhead based on the proportion of the company's production volume that the customer's units require) and allow an additional $50,000 for profit. Assume that (1) the company does not adopt either strategic alternative for 2017, (2) the sales and production volumes will be the same as in 2016, and (3) the indirect labor costs are variable, as shown in Appendix A. What is the additional income that the company would earn from this special order contract?

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Okay lets solve this stepbystep The customer is ordering 150000 retractors The customer will reimbur... View the full answer