Classic Chairs Company produces and sells 1,000 chairs per month. The normal sales price is...
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Accounting
Classic Chairs Company produces and sells 1,000 chairs per month. The normal sales price is $50 per chair. The costs to produce one chair are $10 of direct materials, $15 of direct labour, $5 of variable overhead, and $6 of fixed overhead. A special order for 200 chairs at $40 each has been received. Assuming fixed overhead costs will not increase and present sales will not be affected, the profit increase or decrease from accepting this special order is: a) $800 increase b) $2,000 decrease c) $2,000 increase d) $8,000 increase )
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