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Question: W. Pooh Toy Company currently manufactures a stuffed bear which it sells for $20 each. The current profit margin is $15 a bear. It's considering taking special orders for a customized stuffed bear which it would sell for $35 each. To finish each customized bear, they would incur an additional $3.00 in direct materials and $8.00 in direct labor. They would also increase their monthly fixed costs by $1,200. Assuming each month Pooh sells 800 of these bears which are further processed, what will be its additional monthly profits or losses?

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Accounting Basics, Accounting

Category:- Accounting Basics
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