MIUPI companies produce lanyards (Lanyard). The cost of making a unit of product is $ 1.00 for direct materials, $ 0.50 for indirect labor, $ 1.25 for variable indirect costs. Indirect fixed overhead costs total $ 100,000. Commissions to sellers are $ 0.20 per unit sold. Other variable administrative and sales costs total $ 0.05 per unit. Fixed selling and administrative expenses total $ 200,000. The company taxes its earnings at 40%. Each unit sells for $ 5.00. 9. AEC of the UPR wants to buy 2,000 lanyard to give to its partners. He has offered to pay $ 3.50 per unit. MIUPI has idle capacity, if accepting the order does not incur administrative variable costs and the cost of printing the AEC design is $ 0.10 per unit. These units do not affect the regular sales of the company. Determine if you accept or reject this special order
Volume and Profit Cost Analysis
MIUPI companies produce lanyards (Lanyard). The cost of making a unit of product is $ 1.00 for direct materials, $ 0.50 for indirect labor, $ 1.25 for variable indirect costs. Indirect fixed
9. AEC of the UPR wants to buy 2,000 lanyard to give to its partners. He has offered to pay $ 3.50 per unit. MIUPI has idle capacity, if accepting the order does not incur administrative variable costs and the cost of printing the AEC design is $ 0.10 per unit. These units do not affect the regular sales of the company. Determine if you accept or reject this special order
Step by step
Solved in 2 steps
