Almond has received a special order for 11,000 units of its product at a special price of $60. The product normally sells for $69 and has the following manufacturing costs: Per unit Direct materials $ 21 Direct labor 16 Variable manufacturing overhead 19 Fixed manufacturing overhead 4 Unit cost $ 60 Assume that Almond has sufficient capacity to fill the order. If Almond accepts the order, what effect will the order have on the company’s short-term profit? Multiple Choice $143,000 decrease $99,000 increase Zero $44,000 increase
Almond has received a special order for 11,000 units of its product at a special price of $60. The product normally sells for $69 and has the following manufacturing costs: Per unit Direct materials $ 21 Direct labor 16 Variable manufacturing overhead 19 Fixed manufacturing overhead 4 Unit cost $ 60 Assume that Almond has sufficient capacity to fill the order. If Almond accepts the order, what effect will the order have on the company’s short-term profit? Multiple Choice $143,000 decrease $99,000 increase Zero $44,000 increase
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Almond has received a special order for 11,000 units of its product at a special price of $60. The product normally sells for $69 and has the following
Per unit | |||
Direct materials | $ | 21 | |
Direct labor | 16 | ||
Variable manufacturing |
19 | ||
Fixed manufacturing overhead | 4 | ||
Unit cost | $ | 60 | |
Assume that Almond has sufficient capacity to fill the order. If Almond accepts the order, what effect will the order have on the company’s short-term profit?
Multiple Choice
-
$143,000 decrease
-
$99,000 increase
-
Zero
-
$44,000 increase
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