Business, 30.04.2021 15:30 sdavis1471

Foxworth Tire Company produces truck tires. A local tire distributor recently made a special order offer; the distributor would like to purchase 200 extra-large tires. Foxworth Tire Company is currently producing and selling 10,000 tires; the company has the excess capacity to handle this special order. The distributor has offered to pay $150 for each tire. An accountant at Foxworth Tire Company provides an estimate of the unit product cost as follows: This special order would require a mold investment of $9,500 for the extra-large tires. These molds would have no other purpose and would have no salvage value. The special order tires would also have an additional variable cost of $6.50 per unit associated with having an extra-large tire. This special order would not have any effect on the company's other sales. If the special order is accepted, the company's operating income would increase (decrease) by $7,800 increase. $17,300 increase. $17,300 decrease. $8,300 increase.

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Foxworth Tire Company produces truck tires. A local tire distributor recently made a special order o...

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