Question
Electro Company produces small electrical engines. The manufacturing costs per unit to produce a small engine are given. Direct materials $14.5 Direct labour $11.3 Variable
Electro Company produces small electrical engines. The manufacturing costs per unit to produce a small engine are given. Direct materials $14.5 Direct labour $11.3 Variable overhead $8.1 Fixed overhead $13.9 Total manufacturing cost per unit $47.8 Variable selling costs to obtain and fill orders normally average $3.1 per unit when Electro sells the engines to local customers. Recently, however, Electro paid $91,000 to advertise its various products in an international trade magazine. The Company has just received an order from a large mail-order merchandising company in France for 876 engines at a total offering price of $24,000. The merchandising company is willing to pay all shipping charges except the initial packaging, which costs $0.8 per engine Calculate and enter the total incremental cost that Electro would expect to incur if it accepted and filled this order in the answer space below:
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