Question
Miko Company manufactures a personal computer designed for use in schools and markets it under its own label. Miko has the capacity to produce 27,000
Miko Company manufactures a personal computer designed for use in schools and markets it under its own label. Miko has the capacity to produce 27,000 units a year but is currently producing and selling only 12,000 units a year. The computers normal selling price is $1,740 per unit with no volume discounts. The unit-level costs of the computers production are $530 for direct materials, $110 for direct labor, and $180 for indirect unit-level manufacturing costs. The total product and facility-level costs incurred by Miko during the year are expected to be $2,150,000 and $816,000, respectively. Assume that Miko receives a special order to produce and sell 3,110 computers at $1,270 each. |
Required |
Calculate the contribution to profit from the special order. |
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