Question
MarxMetal Works received an offer from a big-box retail company to purchase2,760metal outdoor tables for $200each.MarxMetal Works accountants determine that the following costs apply to
MarxMetal Works received an offer from a big-box retail company to purchase2,760metal outdoor tables for $200each.MarxMetal Works accountants determine that the following costs apply to the tables:
Direct material $118
Direct labor 46
Manufacturing overhead 65
Total $229
Of the $65of overhead, $13is variable and $52relates to fixed costs. The $52of fixed overhead is allocated as $1.02per direct labor dollar.
(a)What will be the real effect on profit if the order is accepted?
The profit will
select an option
increase
or
decrease
by $ ______________enter a dollar amount
.
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