Adamyan Co

question 62

Essay

Adamyan Co. manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 15,000 medals each month; current monthly production is 12,750 medals. The company normally charges $120 per medal. Cost data for the current level of production are shown below: The company has just received a special one-time order for 700 medals at $83 each. For this particular order, no variable selling and administrative costs would be incurred. This order would also have no effect on fixed costs.
Required:
Should the company accept this special order? Why?

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Definitions:

Increase

A rise in magnitude, quantity, or degree; an upward trend in a numerical value or variable.

RSquare Value

A statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable(s) in a regression model.

Regression Equation

A mathematical formula used to predict a variable based on its relationship with one or more other variables.

Variation

Differences or changes in the condition, amount, or level of something, typically within a set or series of items.