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Question - Chernin Enterprises can make 1,000 shirts per month. Chernin sells 850 shirts per month to department stores at $8 per shirt. The company's cost per shirt based on making 1,000 shirts is:
Prime costs $4
Overhead costs (75 percent fixed at that volume) $2
Gross Corp. offers to buy 150 shirts with special lettering for $5 per shirt. The special lettering will cost Chernin $25.
Determine Chernin's incremental profit or loss if the Gross offer is accepted?
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