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Modesto Company produces CD Players for home stereo units. The CD Players are sold to retail stores for $30. Manufacturing and other costs are as follows: The variable distribution costs are for transportation to the retail stores. The current production and sales volume is 20,000 per year. Capacity is 25,000 units per year.
A San Diego wholesaler has proposed to place a special one-time order of 10,000 units at a reduced price of $24 per unit. The wholesaler would pay all distribution costs, but there would be additional fixed selling and administrative costs of $3,000. All other information remains the same as the original data. What is the effect on profits if the special order is accepted?
Secondary Appraisal
The process of evaluating one's ability to cope or manage the consequences of a potentially stressful event after initially assessing its significance.
Lazarus
Refers to the psychologist Richard Lazarus, known for his theory on emotion and stress which emphasizes the importance of cognitive appraisal.
Social Health
An individual's capacity to form satisfying interpersonal relationships with others and to adapt comfortably to different social situations.
Fight-or-Flight
A physiological response to perceived danger or threat, preparing the body to fight or flee from the threatening situation.
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