Mcniff Corporation makes a range of products. The company's predetermined overhead rate is $23 per direct labor- hour, which was calculated using the following budgeted data: Variable manufacturing overhead Fixed manufacturing overhead Direct labor-hours Management is considering a special order for 650 units of product 096S at $59 each. The normal selling price of product 096S is $70 and the unit product cost is determined as follows: Direct materials. Direct labor Manufacturing overhead applied Unit product cost $ 48,000 $320,000 16,000 If the special order were accepted, normal sales of this and other products would not be affected. The company has ample excess capacity to produce the additional 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. Profit $32.00 11.00 23.00 $66.00 Required: The profit (loss) for the company as a result of accepting this special order would be: $ 45,500

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Mcniff Corporation makes a range of products. The company's predetermined overhead rate is $23 per direct labor-
hour, which was calculated using the following budgeted data:
Variable manufacturing overhead
Fixed manufacturing overhead
Direct labor-hours
Management is considering a special order for 650 units of product 096S at $59 each. The normal selling price of
product 096S is $70 and the unit product cost is determined as follows:
Direct materials
Direct labor
Manufacturing overhead
applied
Unit product cost
$ 48,000
$320,000
16,000
If the special order were accepted, normal sales of this and other products would not be affected. The company has
ample excess capacity to produce the additional 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.
Profit
$32.00
11.00
23.00
$66.00
Required:
The profit (loss) for the company as a result of accepting this special order would be:
$ 45,500
Transcribed Image Text:Mcniff Corporation makes a range of products. The company's predetermined overhead rate is $23 per direct labor- hour, which was calculated using the following budgeted data: Variable manufacturing overhead Fixed manufacturing overhead Direct labor-hours Management is considering a special order for 650 units of product 096S at $59 each. The normal selling price of product 096S is $70 and the unit product cost is determined as follows: Direct materials Direct labor Manufacturing overhead applied Unit product cost $ 48,000 $320,000 16,000 If the special order were accepted, normal sales of this and other products would not be affected. The company has ample excess capacity to produce the additional 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. Profit $32.00 11.00 23.00 $66.00 Required: The profit (loss) for the company as a result of accepting this special order would be: $ 45,500
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