Azure Apparel has received a special order for 3,600 swimsuits at a price of $55 each. The regular average selling price is $70 per swimsuit. The unit product cost is broken down as follows: • Direct labor - $9.00 • Direct materials . Variable overhead = $14.50 = $4.50 • Fixed overhead = $6.00 Azure Apparel has already budgeted its production at 15,000 swimsuits. If the company has spare capacity, what will be the incremental contribution of the special order to operating profit?

Azure Apparel has received a special order for 3,600 swimsuits at a price of $55 each. The regular average selling price is $70 per swimsuit. The unit product cost is broken down as follows: • Direct labor - $9.00 • Direct materials . Variable overhead = $14.50 = $4.50 • Fixed overhead = $6.00 Azure Apparel has already budgeted its production at 15,000 swimsuits. If the company has spare capacity, what will be the incremental contribution of the special order to operating profit?

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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