Answered: what is the impact on the companies…

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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your corporation has received a request for a special order of 6000 units of its product for $16 each. The product unit cost is as follows:(see attached image). The special order would have no effect on the companies total fixed manufacturing overhead cost. If the special order is excepted variable selling cost would decrease by 60%. The special order would have no effect on the companies other sales. The company has ample spare capacity for producing the special order. If the special order is excepted, what is the impact on the companies overall net operating income? a) $13,920 b) $9,600 c) $16,080 d) $20,400

Direct materials.. .
$6.10
Direct labor....
4.20
Variable manufacturing overhead. .
2.30
Fixed manufacturing overhead...
3.60
Variable selling expense
1.80
Fixed selling expense..
1.20
$19.20
Total cost per unit

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