A company has received a special order for 1,800 units of its product at a special price
Question:
A company has received a special order for 1,800 units of its product at a special price of $161. The product normally sells for $190 and has the following manufacturing costs: Cost per Unit Direct materials $ 65 Direct labor 46 Variable manufacturing overhead 25 Fixed manufacturing overhead 11 Total unit cost $ 147 Assume there is sufficient capacity to fill the order without harming normal production and sales. Required: If the order is accepted, what effect will it have on the company’s short-term profit? What minimum unit price should the compnay charge to achieve a $21,600 incremental profit? Now, assume the company is currently operating at full capacity and cannot fill the order without harming normal production and sales. If the order is accepted, what effect will it have on the company’s short-term profit?
Statistics for Business and Economics
ISBN: 978-0321826237
12th edition
Authors: James T. McClave, P. George Benson, Terry T Sincich