Ch. 7 Incremental Analysis Pg 461 Self Practice Please solve the following questions and provide and explanation. Thank you "Big Tent Company has received a special order for 10,000 units at a discount price of $100 each. The product sells for $150, has the following manufacturing costs: " Cost Per Unit Direct Materials $40 Direct Labor $ 20 Variable Manufacturing Overhead $ 20 Fixed Manufacturing Overhead $30 Totaul Unit Cost $110 1) Assume Big Top has enough extra capacity to fill the order without affecting the production or sale of it's product to regular customers. If Big Top accepts offer, what effect will the roder have on the company's short-term profit? 2) If Big Top is at full capacity, what price would be needed to cover all incremental costs, including opportunity costs?
Ch. 7 Incremental Analysis Pg 461 Self Practice
Please solve the following questions and provide and explanation. Thank you
"Big Tent Company has received a special order for 10,000 units at a discount price of $100 each. The product sells for $150, has the following
Cost Per Unit
Direct Materials $40
Direct Labor $ 20
Variable Manufacturing
Fixed Manufacturing Overhead $30
Totaul Unit Cost $110
1) Assume Big Top has enough extra capacity to fill the order without affecting the production or sale of it's product to regular customers. If Big Top accepts offer, what effect will the roder have on the company's short-term profit?
2) If Big Top is at full capacity, what price would be needed to cover all incremental costs, including opportunity costs?
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