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A company has the following data relating to the product they manufacture: Per Unit: Selling price $05 Direct materials 36 Direct labour 15 Variable manufacturing
A company has the following data relating to the product they manufacture: Per Unit: Selling price $05 Direct materials 36 Direct labour 15 Variable manufacturing overhead 10 Fixed manufacturing oyedtead 8 They have an opportunity to ll an order of 500 customized units for a ney.r customer at a price of $50 per unit In addition to their normal expe nses, the company would also need to pay $2,000 to a designer to customize the product in order to fill this order. The company cu rrentiy produces 20,000 units per year and has capacity to produce 22,000 units. Required: Should this order he accepted? By how much will total prot increase or decrease ifthis order is lled? [5 marks} Paragraph V B Aallsarrs-cserif v 12pt
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