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Question: Perro Muerto has a capacity to manufacture 10,000 bricks per week. The operations for the week are as follow:

Sales (8,500 units @$14 each) $119,000

Manufacturing costs

Variable $8 per unit

Fixed $12,000

Manufacturing costs

Variable commisions $1.5 per unit

Fixed $2,000

Perro Muerto is offered a special order of 1,500 bricks at a selling price of $10 each. Assume these units are subject to 33% INCREASE of the usual commission rate per unit. There is no effect on the regular sales. Should Perro Muerto take the special order?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92868862

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