A company received a special one-time order to buy 6,000 of its portable radios for $20. The radios generally sell for $25. Each radio's total manufacturing cost is $21.50, which includes $2.50 of allocated fixed overhead. Should the company accept the special order?
What will be an ideal response?
| Sale of units (6,000 * $20) | $120,000 |
| Cost of the units (6,000 * 19*) | (114,000) |
| Incremental income from the special order | $ 6,000 |
*$21.50 - $2.50 = $19
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