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Kobe Company manufactures different designs of love seats. At the start. the company built a large plant with the expectation that the demand for its
Kobe Company manufactures different designs of love seats. At the start. the company built a large plant with the expectation that the demand for its product will increase once the market is developed. However. at present. the company utilizes only ?0% of its plant capacity. An account executive received an offer from a large motel chain to purchase 150 units of love seats for a price of P950. The normal selling price for these seats is P1500 each. Manufacturing costs for the current period's production of 350 love seats are presented below. Fixed cost is expected to be unchanged with the acceptance of the order. Production Costs for 350 seats Materials 122,500 La laor 105.000 Factory Overhead {40% xed] 140,000 The account executive's commission for this order is 20%.. Question 8 3 pts What is the decremental prot per unit from accepting the special order? ,ji r50 :_:; 200 130 '1. 190
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