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Wagner Ltd Can Manufacture 490,000 Tennis Rackets a Year at a Variable

Question 46

Multiple Choice

Wagner Ltd can manufacture 490,000 tennis rackets a year at a variable cost of $15 per racket and fixed costs of $500,000. Wagner budgeted that it can sell 400,000 at $25 each. An additional order of 100,000 was received, but at a discount of 35% from the regular price. If Wagner accepts the special order, profit before taxes will


A) Decrease by $100,000
B) Increase by $125,000
C) Increase by $25,000
D) Some other amount

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