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Only one product is produced and sold by the Astros Compay. The table below show the costs of producing and selling a single unit of
Only one product is produced and sold by the Astros Compay. The table below show the costs of producing and selling a single unit of this product at the company's normal activity level of 52,000 units per month Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling & administrative expense Fixed selling & administrative expense Per Unit $48.60 $ 9.30 $ 2.30 $19.70 $ 4.20 $20.00 Astro's normal selling price of the product is $110.10 per unit. An overseas customer has sent in an order for 3,200 units to be delivered this month but at a special discounted price of $88.40 per unit Company officials believe that this order would not change the total amount of the company's fixed costs. However the variable selling and administrative expense per unit would be $2.40 less per unit on this order than on normal sales. You have determined that direct labor is a variable cost in this company. Suppose Astros has enough idle capacity to produce the units required by the overseas customer. Astros monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be
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