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Industry manufactures a product with the following costs per unit at the expected production of 30,000 units: Direct materials.............................. $ 5 Direct labor.................................... $15 Variable

  1. Industry manufactures a product with the following costs per unit at the expected production of 30,000 units:

Direct materials.............................. $ 5

Direct labor.................................... $15

Variable manufacturing overhead.. $ 8

Fixed manufacturing overhead...... $ 6

The company has the capacity to produce 60,000 units. The product regularly sells for $45. A new potential customer has offered to purchase 2,000 units for $40 each. What is the effect on net income, if Missoula Industries accepts the special order?

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