Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Calculate the total incremental profit from the special order. (Round to the nearest $1.00) 10 points Save A QUESTION 10 Corda Company produces a single
Calculate the total incremental profit from the special order. (Round to the nearest $1.00)
10 points Save A QUESTION 10 Corda Company produces a single product and has capacity to produce 140,000 units per month. Corda currently sells and produces 80,000 units per month. Costs at this level of activity are given in the table below. The normal selling price of the product is $100 per unit. A new customer offers to purchase 50,000 units for $78 per unit. If the special order is accepted, there will be no additional fixed general and administrative costs. Due to labor availability limits Corda would have to schedule extra shifts to fill the special order. The production manager estimates that the labor costs per unit of the special order would be 20% higher than these costs for normal production and that fixed manufacturing costs would increase by 10% for the month. Other than those impacts Corda believes the special order would not affect its normal sales or operations. Per Unit Total Direct materials (variable) $12.50 $1,000,000 Direct labor (variable) $29.00 $2,320,000 Variable overhead (mfg) $10.00 $ 800,000 Fixed overhead (mfg) $17.50 $1,400,000 Fixed general and administrative $13.00 $1,040,000 Totals $82.00 $6,560,000 Calculate the total incremental profit from the special order. (Round to the nearest $1.00)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started