Question
Glade Company produces a single product.The cost of producing and selling one unit at the current activity level of 8,000 units per month is as
Glade Company produces a single product.The cost of producing and selling one unit at the current activity level of 8,000 units per month is as follows:
Direct materials$2.50
Direct labour$3.00
Variable manufacturing overhead$0.50
Fixed manufacturing overhead$4.25
Variable selling and administrative expenses$1.50
Fixed selling and administrative expenses$2.00
The normal selling price is $16 per unit and the monthly capacity is 10,000 units.An order has been received from an overseas customer for 1,500 units at a price of $12 per unit.No additional costs will be incurred to meet this order.
Should this order be accepted?
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