Aloha swimwear has received a special order for 3,250 bikinis at a price of $60 each. The regular average selling price is $75 per suit. The unit product cost is broken down as follows: direct labor, $8.50; direct materials, $15.75; variable overhead, $3.75; and fixed overhead, $5.25. Aloha already budgeted its production at 12,000 suits. If the company has spare capacity, what will be the incremental contribution of the special order to operating profit? A. $104,000.00. B. $38,187.50. C. $86,937.50. D. $48,750.00.

Aloha swimwear has received a special order for 3,250 bikinis at a price of $60 each. The regular average selling price is $75 per suit. The unit product cost is broken down as follows: direct labor, $8.50; direct materials, $15.75; variable overhead, $3.75; and fixed overhead, $5.25. Aloha already budgeted its production at 12,000 suits. If the company has spare capacity, what will be the incremental contribution of the special order to operating profit? A. $104,000.00. B. $38,187.50. C. $86,937.50. D. $48,750.00.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 4CMA: Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold...

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