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Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of
Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 41,000 units per month is as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling & administrative expense Fixed selling & administrative expense Per Unit $43.10 $ 8.20 $ 1.20 $17.50 $ 2.00 $ 9.00 The normal selling price of the product is $88.90 per unit. An order has been received from an overseas customer for 2,100 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $1,30 lets per unit on this order than on normal sales. Direct labor is a variable cost in this company. Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $77.40 per unit The monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be: Multiple Choice O ($20,000) $14.070 $50,820 ($7,560)
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