•Let us assume that at the present capacity of 70% , it is producing 70 machines annually and the total fixed overhead is 210,000. •How much is the net profit if the order is accepted ? •How much is the net profit if the order is not accepted ?

•Let us assume that at the present capacity of 70% , it is producing 70 machines annually and the total fixed overhead is 210,000. •How much is the net profit if the order is accepted ? •How much is the net profit if the order is not accepted ?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 4.2IP

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Question

•Let us assume that at the present capacity of 70% , it is
producing 70 machines annually and the total fixed
overhead is 210,000.
•How much is the net profit if the order is accepted ?
•How much is the net profit if the order is not accepted ?

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