Cranberry, Incorporated has received a special order for 100 units of its product at a special price of $2,100. The product normally sells for $2,800 and has the following manufacturing costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total unit cost Cost per Unit $840 420 560 700 $2,520 Assume that Cranberry has sufficient capacity to fill the order without harming normal production and sales. If Cranberry accepts the order, what effect will the order have on the company's short-term profit? $28,000 increase $42,000 decrease $42,000 increase $70,000 decrease
Cranberry, Incorporated has received a special order for 100 units of its product at a special price of $2,100. The product normally sells for $2,800 and has the following manufacturing costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total unit cost Cost per Unit $840 420 560 700 $2,520 Assume that Cranberry has sufficient capacity to fill the order without harming normal production and sales. If Cranberry accepts the order, what effect will the order have on the company's short-term profit? $28,000 increase $42,000 decrease $42,000 increase $70,000 decrease
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Cranberry, Incorporated has received a special order for 100 units of its product at a
special price of $2,100. The product normally sells for $2,800 and has the following
manufacturing costs:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Total unit cost
Cost per Unit
$840
420
560
700
$2,520
Assume that Cranberry has sufficient capacity to fill the order without harming
normal production and sales. If Cranberry accepts the order, what effect will the
order have on the company's short-term profit?
$28,000 increase
$42,000 decrease
$42,000 increase
$70,000 decrease
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