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Capitol has received a special order for 2,060 units of its product at a special price of $156. The product normally sells for $206 and
Capitol has received a special order for 2,060 units of its product at a special price of $156. The product normally sells for $206 and has the following manufacturing costs: Per unit $ 56 36 26 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit cost 46 $164 fixed Assume that Capitol has sufficient capacity to fill the order without harming normal production and sales and overhead is unavoidable. a. If Capitol accepts the order, what effect will the order have on the company's short-term profit? Increase in Profit Decrease in Profit b. What minimum price should Capitol charge to achieve a $46,000 incremental profit? (Round your answer to 2 decimal places.) Minimum Price c. Now assume Capitol is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Capitol accepts the order, what effect will the order have on the company's short-term profit? Increase in Profit Decrease in Profit
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