Question: ABC Company has received a request for a special order of 8,000 units, and the potential customer has offered to pay $15 per unit. Currently,
ABC Company has received a request for a special order of 8,000 units, and the potential customer has offered to pay $15 per unit. Currently, ABC Company is producing 56,000 units per month and the product usually sells for $22 per unit. For these {nn..... If ABC Company accepts the order, it will save $3 in variable selling and administrative expenses per unit for the 8,000 units in the special order. Assuming that ABC Company has a production capacity of 70,000 units monthly, what would be the effect on profitability of accepting the special order? Decrease in profitability of $56,000 Increase in profitability of $8,800 Increase in profitability of $14,400 Increase in profitability of $32,800 None of the above ABC Company has received a request for a special order of 8,000 units, and the potential customer has offered to pay $15 per unit. Currently, ABC Company is producing 56,000 units per month and the product usually sells for $22 per unit. For these {nn..... If ABC Company accepts the order, it will save $3 in variable selling and administrative expenses per unit for the 8,000 units in the special order. Assuming that ABC Company has a production capacity of 70,000 units monthly, what would be the effect on profitability of accepting the special order? Decrease in profitability of $56,000 Increase in profitability of $8,800 Increase in profitability of $14,400 Increase in profitability of $32,800 None of the above
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