Question
Bertans has received a special order for 2,400 units of its product at a special price of $18. The product normally sells for $25 and
Bertans has received a special order for 2,400 units of its product at a special price of $18. The product normally sells for $25 and has the following manufacturing costs:
| Per unit | ||
Direct materials |
| $ | 7 |
Direct labor |
|
| 4 |
Variable manufacturing overhead |
|
| 2 |
Fixed manufacturing overhead |
|
| 3 |
Unit cost |
| $ | 16 |
Assume that Bertans' production is at full capacity. If Bertans accepts the order, what effect will the order have on the companys short-term profit?
If a decrease, place a sign before your answer. For example, a decrease of $1,000 would be answered -1,000.
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