Question
Jordan Company manufactures a personal computer designed for use in schools and markets it under its own label. Jordan has the capacity to produce 34,000
Jordan Company manufactures a personal computer designed for use in schools and markets it under its own label. Jordan has the capacity to produce 34,000 units a year but is currently producing and selling only 20,000 units a year. The computers normal selling price is $1,720 per unit with no volume discounts. The unit-level costs of the computers production are $560 for direct materials, $240 for direct labor, and $180 for indirect unit-level manufacturing costs. The total product- and facility-level costs incurred by Jordan during the year are expected to be $2,230,000 and $803,000, respectively. Assume that Jordan receives a special order to produce and sell 3,180 computers at $1,240 each.
Required Calculate the contribution to profit from the special order. Should Jordan accept or reject the special orderStep by Step Solution
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