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PPD, Inc. produces a hard disk drive that sells for $175 per unit. The cost of producing 25,000 drives in the prior year was: Direct material$625,000Direct labor375,000Variable overhead125,000Fixed overhead1,500,000Total cost$2,625,000At the start of the current year, the company received an order for 4,000 drives from a computer company in China. Management of PPD has mixed feelings about the order. On the one hand they welcome the order because they currently have excess capacity.
Also, this is the company's first international order. On the other hand, the company in China is willing to pay only $135 per unit. What will be the effect on profit of accepting the order?
Round to two decimal places.
Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..
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