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Sally produces a single product. The company's April income statement is as follows: April Income Statement Sales ( 600 x $60 ) $36,000 Cost of
Sally produces a single product. The company's April income statement is as follows: April Income Statement Sales ( 600 x $60 ) $36,000 Cost of goods sold 33,000 Gross profit $3,000 Selling and administrative 2,000 Net income $1,000 There were no beginning or ending inventories of work-in-process or finished goods. Sally's full manufacturing costs were as follows: April Cost of Goods Sold Direct materials ( 600 x $10 ) $6,000 Direct labor ( 600 x $16 ) 9,600 Variable manufacturing overhead ( 600 x $9 ) 5,400 Fixed manufacturing overhead 12,000 Total $33,000 Average cost per unit $55 Selling and administrative expenses are all fixed. Sally just received a special order from a firm in Italy to purchase 450 units at $55 each. The order will not affect the selling price to regular customers. Determine the net advantage or disadvantage (profit increase or decrease) of accepting the order, assuming Sally does not have excess capacity. Note: Do not use a negative sign with your answer. Profits would Answer by $
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