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A company contemplating the acceptance of a special order has the following unit cost behavior, based on 10000 units: Direct materials $ 4 Direct labor
A company contemplating the acceptance of a special order has the following unit cost behavior, based on 10000 units:
Direct materials | $ 4 |
Direct labor | 10 |
Variable overhead | 8 |
Fixed overhead | 6 |
A foreign company wants to purchase 2200 units at a special unit price of $25. The normal price per unit is $40. In addition, a special stamping machine will have to be purchased for $4000 in order to stamp the foreign companys name on the product. The incremental income (loss) from accepting the order is
$(6600).
$(2200).
$6600.
$2600.
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