Question
Legumes Inc. sells vegetable soup at $3 per can. A customer wants to purchase 800 cans for $2 each. The company normally produces 3,000 cans
Legumes Inc. sells vegetable soup at $3 per can. A customer wants to purchase 800 cans for $2 each. The company normally produces 3,000 cans of soup per year and pays $4,500 of direct materials, $500 of direct labor, and $3,000 of overhead. The $3,000 of overhead costs include $700 of product-level, $1,000 of facility-level costs, $900 of unit-level costs, and $400 of batch-level costs. If Legumes Inc. accepts the order, how much would profit increase (decrease)?
It says the answer is C, please show how to find that.
a. $267 increase b. $533 decrease c. $80 decrease d. $267 decrease
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started