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King Tech Company $($KING$)$ manufactures smart TV boxes $($TV boxes$)$ in Hong Kong, China and the region of Southeast Asia. KING often receives special orders from companies in emerging markets. KING$$s operating capacity is $26,000$ units of TV box, and it is currently selling $20,000$ units manufactured in $20$ batches of $1,000$ units each. KING got a special order for producing $5,000$ units of smart TV box for $$1,300,000$ from Tina Ltd$.$ All of the other costs will be the same except the fact that no variable selling costs will be incurred. A one$-$time $$25,000$ cost will be incurred for KING. Suppose there are no further incremental batch$-$level costs.

The following information is provided about KING$$s current operations: $$Sales and production cost data for $20,000$ units $$Selling price:$$400\mathrm{.}00$Unit variable manufacturing costs:$$170\mathrm{.}00$Unit variable selling costs:$$30\mathrm{.}00$Unit fixed manufacturing costs:$$120\mathrm{.}00$Unit fixed marketing costs:$$40\mathrm{.}00$a$)$ Discuss whether the special order should be accepted by showing the total relevant cost of accepting this special order and the change in the operating income if the special order is accepted. $(10$ marks$)$b$)$ Assume that the capacity is $21,000$ units and the special order must be taken in full or rejected. Repeat $($a$).(12$ marks$)$c$)$ Assume that the capacity is $21,000$ units, determine the minimum price per unit of the special order that can be accepted. $(8$ marks$)$d$)$ Suppose that this special order is accepted but KING suddenly discovers that there will be a delay and it cannot meet the originaldelivery date. It can provide the same units by purchasing the TV box units after some repackaging by another firm in Shenzhen. KING knows that their TV boxes are also of excellent quality. However, there is not enough time to check the products to determine product quality and if the specifications could be met. Advise what KING should do and discuss the ethical and strategic considerations with the decision.

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