Question
Fender creates guitars. The following per unit information relates to its flagship stratocaster: Sales price $1000 Direct labor $200 Direct material $400 Variable $175
Fender creates guitars. The following per unit information relates to its flagship stratocaster: Sales price $1000 Direct labor $200 Direct material $400 Variable $175 overhead Fixed overhead $55 Fender has received a special order from Jimi Hendrix for 2,500 of its flagship guitars at $800 each. This order would incur an additional shipping cost of $13 per unit. Fender has already budgeted its production at 9.500 units. Assuming Fender has excess capacity to fulfill the order. what will be its total incremental income from the order?
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