Antonia Company sells a product for a regular unit price of P75.00. The cost of producing and
Question:
Antonia Company sells a product for a regular unit price of P75.00. The cost of producing and selling a unit of this product at the normal activity level of 50,000 units per month is as follows:
Manufacturing costs:
Direct materials - P32.80 per unit
Direct labor - P7.20 per unit
Variable manufacturing overhead - P3.00 per unit
Fixed manufacturing overhead - P100,000 per month
Selling and administrative costs:
Variable - P2.50 per unit
Fixed - P36,000 per month
An order has been received from a customer for 5,000 units at a discounted price of P50.00. This order has no effect on normal sales and would not change the total fixed costs. The variable selling and administrative expense would be P0.50 less per unit on this order than on normal sales. Should Antonia accept or reject the special order? Show your computations.
College Accounting Chapters 1-30
ISBN: 978-1259631115
15th edition
Authors: John Price, M. David Haddock, Michael Farina