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Beazer Company manufactures a product with the following full unit costs at a volume of 2,000 units:

1. Beazer Company manufactures a product with the following full unit costs at a volume of 2,000 units:

Direct materials
$ 375
Direct labor 195
Manufacturing overhead (25% variable) 400
Selling expenses (40% variable) 240
Administrative expenses (20% variable) 200
Total per unit $1,410

A company recently approached Beazer’s management with an offer to purchase 350 units for $975 each. Beazer currently sells the product to dealers for $1,850 each. Beazer’s capacity is sufficient to produce the extra 350 units. No selling expenses would be incurred on the special order. Should Beazer’s management accept the offer? What will be the net change to profits?

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Accounting-8194725.xls

Volume -(in units) 2,000 Direct Material
Direct Labor
Variable Manufacturing O/H
Variable Selling Expenses
Variable Administrative exp
Total Variable cost per unit
Fixed Manufacturing O/H
Fixed...

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