Question
KennelMetal Works received an offer from a big-box retail company to purchase3,240metal outdoor tables for $232each.KennelMetal Works accountants determine that the following costs apply to
KennelMetal Works received an offer from a big-box retail company to purchase3,240metal outdoor tables for $232each.KennelMetal Works accountants determine that the following costs apply to the tables:
Direct material$142
Direct labor54
Manufacturing overhead76
Total$272
Of the $76of overhead, $15is variable and $61relates to fixed costs. The $61of fixed overhead is allocated as $1.18per direct labor dollar.
(a)What will be the real effect on profit if the order is accepted?
The profit will
select an option
increase
decrease
by $
enter a dollar amount
.
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