Marsdon Company has an annual production capacity of 15,000 units. The costs associated with production and sale of the company's product are given below:
The company presently is selling 12,000 units annually at a selling price of $28 each. A special order has been received from a distributor who wants to purchase 3,000 units at a special price of $20 each. Regular sales would not be affected by this order and the order could be filled without any impact on total fixed costs. Sales commissions on the special order would be reduced by one-third.
Required:
Determine whether the company should accept the special order.
Definitions:
Intelligence Quotient
A measure of a person's intelligence as indicated by an IQ test, where an average score is usually set at 100.
Summer Vacation
A holiday period during the summer season when schools are closed, and people often travel or rest.
Overregularization
A language development error where children apply standard grammatical rules to irregular verbs or nouns.
Faulty Language Development
An atypical progression in acquiring language skills, which may involve delays or disorders in understanding or producing spoken, written, or sign language.
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