Question
Alpha Company is approached by a customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The following
Alpha Company is approached by a customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The following per unit data apply for sales to regular customers:
Direct materials $1720
Direct labour 1015
Variable manufacturing support 1379
Fixed manufacturing support 2424
Markup (30%)
Alpha Company currently has excess capacity. Compute Alpha's change in operating income if the one-time-only special order is accepted for 1153 units at a selling price per unit of $4809. (If Alpha's operating income decreases as a result of accepting the one-time-only special order, present the answer as a negative figure. Otherwise, present the answer without a sign).
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