Question: At Bargain Electronics, it costs $29 per unit ($15 variable and $14 fixed) to make an MP3 player that normally sells for $40. A foreign
At Bargain Electronics, it costs $29 per unit ($15 variable and $14 fixed) to make an MP3 player that normally sells for $40. A foreign wholesaler offers to buy 3,200 units at $28 each. Bargain Electronics will incur special shipping costs of $2 per unit. Assuming that Bargain Electronics has no excess operating capacity, indicate the net income (loss) Bargain Electronics would realize by accepting the special order. Should it accept the offer?
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