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Which order should accept and why

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You are evaluating orders from two customers but can accept only one of the orders because of your company's limited capacity. The first order is for 100 units of a product with a contribution margin ratio of 60% and a selling price of $1,000. The second order is for 500 units of a product with a contribution margin ratio of 20% and a selling price of $800. The incremental fixed costs are the same for both orders.

Question 1: Which order should you accept? Why? Support your decision with calculations.

Reference no: EM132543710

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