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Kasten, Inc. budgeted 10,000 widgets for production during 2010. Kasten has capacity to produce 12,000 units. Fixed factory overhead is allocated to production. The following
Kasten, Inc. budgeted 10,000 widgets for production during 2010. Kasten has capacity to produce 12,000 units. Fixed factory overhead is allocated to production. The following estimated costs were provided: Direct material ($7/unit) $ 70,000 Direct labor ($15/hr. 2 hrs./unit) 300,000 Variable manuf overhead ($3/unit) 30,000 Fixed factory overhead costs ($5/unit) 50,000 Total $450,000 Cost per unit = $45 Kasten received an order for 1,000 units from a new customer in a country in which Kasten has never done business. This customer has offered $43 per widget. Should Kasten accept the order? How much would profit change if it accepts the offer
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