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special problem 2 - special offer

special problem 2 - special offer - YasminEssa...

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Yasmin Essa ACCT 202 – FUNDAMENTALS OF MANAGERIAL ACCOUNTING PROFESSOR STEVE MARKOFF   CASE STUDY PROBLEM #2 (Due Thursday November 12 by class time via hard copy) WidgetWorld currently sells its product in 3 well-defined territories.  These territories cover only the eastern portion of  the country.  The company sells direct to customers and, as a rule, a customer only purchases 1 unit.  Occasionally,  WidgetWorld is approached by retail firms who wish to buy in quantities of 1,000 or more.  The company will sell  wholesale but only if the buyer operates well beyond the limits of territories 1, 2 and 3.  Also, the sale must make a  significant contribution to net income. The Acme Company (Wiley E. Coyote, President), has recently made an offer to purchase up to 15,000 widgets at a  price of $220 apiece.  The current selling price of the Widget is $300.  Also, in the 4 th  quarter of the most recent year,  the average total cost per unit sold was $202.50.  The income statement for the most recent quarter was as follows:
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