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A company manufactures computers and provides the following cost information for the production of one computer: Direct materials $46 Direct labor 64 Variable manufacturing overhead
A company manufactures computers and provides the following cost information for the production of one computer:
Direct materials | $46 |
Direct labor | 64 |
Variable manufacturing overhead | 48 |
Fixed manufacturing overhead | 34 |
Total cost per unit | 192 |
The $34 amount reflects the amount of indirect cost allocated to each unit. However, as indicated, the total of these indirect costs is fixed.
The company has received a special order for 500 computers at a price of $175 per unit.
By how much will overall company net income change if this order is accepted?
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