Acme Corp.

Acme produces a high-quality computer chip. Unit production costs (based on the capacity production of 135,000 units per year) follow:

Direct material $58

Direct labor 30

Overhead (33% variable) 24

Total $112

Other information:

Sales price $130

SG&A costs (50% variable) 25

1. The Memory Division is presently operating at a level of 105,000 chips per year. How much profit or loss will the Memory Division record if it accepts a special order on 4,000 chips at $100.?