Mcniff Corporation makes a range of products. The company's predetermined overhead rate is $23 per direct...

Transcribed Image Text:

Mcniff Corporation makes a range of products. The company's predetermined overhead rate is $23 per direct labor-hour, which was calculated using the following budgeted data: Variable manufacturing overhead Fixed manufacturing overhead Direct labor-hours $ 48,000 $ 320,000 16,000 Management is considering a special order for 650 units of product 096S at $59 each. The normal selling price of product 096S is $70 and the unit product cost is determined as follows: Direct materials Direct labor Manufacturing overhead applied Unit product cost $ 32.00 11.00 23.00 $ 66.00 If the special order were accepted, normal sales of this and other products would not be affected. The company has ample excess capacity to produce the additional units. Assume that direct labor is a variable cost, variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by the special order. Required: The financial advantage (disadvantage) for the company as a result of accepting this special order would be: Mcniff Corporation makes a range of products. The company's predetermined overhead rate is $23 per direct labor-hour, which was calculated using the following budgeted data: Variable manufacturing overhead Fixed manufacturing overhead Direct labor-hours $ 48,000 $ 320,000 16,000 Management is considering a special order for 650 units of product 096S at $59 each. The normal selling price of product 096S is $70 and the unit product cost is determined as follows: Direct materials Direct labor Manufacturing overhead applied Unit product cost $ 32.00 11.00 23.00 $ 66.00 If the special order were accepted, normal sales of this and other products would not be affected. The company has ample excess capacity to produce the additional units. Assume that direct labor is a variable cost, variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by the special order. Required: The financial advantage (disadvantage) for the company as a result of accepting this special order would be:

Answer rating: 100% (QA)

Answer To determine the financial advantage or disadvantage for McNiff Corporation from accepting th... View the full answer