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Ajax Manufacturing Company manufactures a product that normally sells for $80 per unit. Ajax expects...

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Accounting

Ajax Manufacturing Company manufactures a product that normally sells for $80 per unit. Ajax expects to make and sell 80,000 units in 2014, and has capacity to produce 100,000 units. Variable costs of the products total $20 per unit, and fixed product costs total $2,400,000. A prospective new customer offers to buy 10,000 units of product for $30 per unit.

Should Ajax accept the offer?

Why or why not?

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