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31 May, 19:16

A foreign company wants to purchase 2100 units at a special unit price of $25. The normal price per unit is $40. In addition, a special stamping machine will have to be purchased for $4000 in order to stamp the foreign company's name on the product. The incremental income (loss) from accepting the order is

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  1. 31 May, 19:35
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    The missing information in the question is;

    The variable manufacturing cost per unit is $22 (including direct material, labor and variable overheads)

    Explanation:

    Incremental sales 2,100*25 $52,500

    Variable manufacturing cost 2100*22 ($46,200)

    Stamping Machine for this order ($4,000)

    Incremental income from accepting the order $2,300
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