Question
Halp Save & Bat Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's
Halp Save & Bat 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 49,000 units per month is as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling & administrative expense Fixed selling & administrative expense The normal selling price of the product is $104.10 per unit. 7wx Unit $47.10 $9.00 $ 2.00 $ 19.10 $ 3.60 $ 17.00 An order has been received from an overseas customer for 2,900 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 $2.50 less 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 $85.40 per unit. The monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be: Multiple Choice $74,820 ($35.960
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