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Jack's company is contemplating the acceptance of a special order has the following unit cost behavior, based on 10,000 units: Direct materials 6 Direct labor
Jack's company is contemplating the acceptance of a special order has the following unit cost behavior, based on 10,000 units:
Direct materials | 6 |
Direct labor | 10 |
Variable overhead | 8 |
Fixed overhead | 4 |
A local company wants to purchase 2,000 units at a special unit price of $25. The normal price per unit is $40. In addition, an engraver will have to be purchased for $4,000 in order for the local company to have it's logo engraved.
What is the incremental income (loss) from accepting the order?
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