Paradiso Company manufactures dolls that are sold to various distributors.The company produces at full capacity for six months each year to meet peak demand; the manufacturing facility operates at 80% of capacity for the other six months of the year.The company has provided the following data for the year: Paradiso receives an offer to produce 5,000 dolls for a special event.This is a one-time opportunity during a period when the company has excess capacity.What is the minimum selling price the company should accept for the order?

Question

Paradiso Company manufactures dolls that are sold to various distributors.The company produces at full capacity for six months each year to meet peak demand; the manufacturing facility operates at 80% of capacity for the other six months of the year.The company has provided the following data for the year:  Paradiso receives an offer to produce 5,000 dolls for a special event.This is a one-time opportunity during a period when the company has excess capacity.What is the minimum selling price the company should accept for the order?

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The Answer of Paradiso Company manufactures dolls that are sold to various distributors.The company produces at full capacity for six months each year to meet peak demand; the manufacturing facility operates at 80% of capacity for the other six months of the year.The company has provided the following data for the year:  Paradiso receives an offer to produce 5,000 dolls for a special event.This is a one-time opportunity during a period when the company has excess capacity.What is the minimum selling price the company should accept for the order?

Paradiso Company Manufactures Dolls That Are Sold to Various Distributors