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Question:(Account) 21-59 A company has a capacity of 200,000 units. They are currently producing and selling 180,000 units at $100 per unit. The cost of a unit at the present production level is as follows: Per unit DM $ 38 DL $ 22 Variable OH $ 12 $ 18 $ 90 Fixed OH Total An order for 20,000 units has just been received from a foreign company at a price of $84 per unit. Freight costs of $4 per unit would be required. What will the incremental profit/loss be on this order if they choose to accept it?

Question:(Account) 21-59 A company has a capacity of 200,000 units. They are currently producing and selling 180,000 units at $100 per unit. The cost of a unit at the present production level is as follows: Per unit DM $ 38 DL $ 22 Variable OH $ 12 $ 18 $ 90 Fixed OH Total An order for 20,000 units has just been received from a foreign company at a price of $84 per unit. Freight costs of $4 per unit would be required. What will the incremental profit/loss be on this order if they choose to accept it?

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 13E
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Question:(Account) 21-59 A company has a capacity of 200,000 units. They are currently producing and selling 180,000 units at $100 per unit. The cost of a unit at the present production level is as follows: Per unit DM $ 38 DL $ 22 Variable OH $ 12 $ 18 $ 90 Fixed OH Total An order for 20,000 units has just been received from a foreign company at a price of $84 per unit. Freight costs of $4 per unit would be required. What will the incremental profit/loss be on this order if they choose to accept it?
Transcribed Image Text:Question:(Account) 21-59 A company has a capacity of 200,000 units. They are currently producing and selling 180,000 units at $100 per unit. The cost of a unit at the present production level is as follows: Per unit DM $ 38 DL $ 22 Variable OH $ 12 $ 18 $ 90 Fixed OH Total An order for 20,000 units has just been received from a foreign company at a price of $84 per unit. Freight costs of $4 per unit would be required. What will the incremental profit/loss be on this order if they choose to accept it?
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