Direct labor 375,000 Variable overhea 125,000 d Fixed overhea 1,500,000 d Total cost $2,625,000 At the start of the current year, the company received an order for 3,000 drives from a computer company in China. Management of PowerDrive has mixed feelings about the order. On the one hand they welcome the order because they currently have excess capacity. Also, this is the company's first international order. On the other hand, the company in China is willing to pay only $130 per unit. What will be the effect on profit of accepting the order? 255,000.00 Comment: (given as feedback) Incremental Revenue - Incremental Costs = Incremental Profit Total # of drives * pay per drive Less Incremental Costs for Material Incremental Costs for Labor Incremental Costs for Overhead Equal Incremental Profit Cost per unit Direct Material 625,000/25,000 = 25 Direct Labor 375,000/25,000 = 15 Variable Overhead = 125,000/25,000 = 5 Sales (3,000*130) $390,000 Direct Materials (3,000*25) ($75,000) Direct Labor (3,000*15) ($45,000) Variable Overhead (3,000*5) ($15,000) Profit $255,000