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Mcniff Corporation makes a range of products. The company's predetermined overhead rate is $20 per direct labor-hour, whichi was calculated using the following budgeted data: Variable manufacturing overhead $ 180,000 Fixed manufacturing overhead $ 380,000 Direct labor-hours 20,000 Management is considering a special order for 200 units of product 096S at $122 each. The normal selling price of product 096S is $149 and the unit product cost is determined as folows: Direct materials $ 67.00 Direct labor 32.00 Manufacturing overhead applied 44.80 Unit product cost $ 143.80 It the special order were accepted, normal sales ot this and other products would not be attected. Ihe company has ample excess capacity to produce the additonal units. Assume that direct labor is a variable cost, variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by the special order. Required: The financial advantage (disadvantage) for the company as a result of accepting this special order would be:

Mcniff Corporation makes a range of products. The company's predetermined overhead rate is $20 per direct labor-hour, whichi was calculated using the following budgeted data: Variable manufacturing overhead $ 180,000 Fixed manufacturing overhead $ 380,000 Direct labor-hours 20,000 Management is considering a special order for 200 units of product 096S at $122 each. The normal selling price of product 096S is $149 and the unit product cost is determined as folows: Direct materials $ 67.00 Direct labor 32.00 Manufacturing overhead applied 44.80 Unit product cost $ 143.80 It the special order were accepted, normal sales ot this and other products would not be attected. Ihe company has ample excess capacity to produce the additonal units. Assume that direct labor is a variable cost, variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by the special order. Required: The financial advantage (disadvantage) for the company as a result of accepting this special order would be:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mcniff Corporation makes a range of products. The company's predetermined overhead rate is $20 per direct labor-hour, which was calculated using the following budgeted data: Variable manufacturing overhead $ 180,000 Fixed manufacturing overhead $ 380,000 Direct labor-hours 20,000 Management is considering a special order for 200 units of product 096S at $122 each. The normal selling price of product 096S is $149 and the unit product cost is determined as follows: Direct materials $ 67.00 Direct labor 32.00 Manufacturing overhead applied 44.80 $ 143.80 Unit product cost It the special order were accepted, normal sales of this and other products would not be attected. Ihe company has ample excess capacity to produce the adasonal unts. Assume that direct labor is a variable cost variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by the special order. Required: The financial advantage (disadvantage) for the company as a result of accepting this special order would be:
Transcribed Image Text:Mcniff Corporation makes a range of products. The company's predetermined overhead rate is $20 per direct labor-hour, which was calculated using the following budgeted data: Variable manufacturing overhead $ 180,000 Fixed manufacturing overhead $ 380,000 Direct labor-hours 20,000 Management is considering a special order for 200 units of product 096S at $122 each. The normal selling price of product 096S is $149 and the unit product cost is determined as follows: Direct materials $ 67.00 Direct labor 32.00 Manufacturing overhead applied 44.80 $ 143.80 Unit product cost It the special order were accepted, normal sales of this and other products would not be attected. Ihe company has ample excess capacity to produce the adasonal unts. Assume that direct labor is a variable cost variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by the special order. Required: The financial advantage (disadvantage) for the company as a result of accepting this special order would be:
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