Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ore Manufacturing makes a single product. Budget information regarding the current period is given below: Revenue (100,000 units at $8.00) $800,000 Direct materials $170,000 Direct

ore Manufacturing makes a single product. Budget information regarding the current period is given below:

Revenue (100,000 units at $8.00) $800,000

Direct materials $170,000

Direct labor 125,000

Variable manufacturing overhead 235,000

Fixed manufacturing overhead 110,000 640,000

Total $160,000

Deer Company approaches Core with a special order for 15,000 units at a price of $8.50 per unit. Variable costs will be the same as the current production and accepting the special order will not have any impact on the rest of the company%u2019s orders. However, Core is operating at capacity and will incur an additional $55,000 in fixed manufacturing overhead if the order is accepted. What is the incremental revenue associated with accepting the special order?

$127,500

$927,500

($7,000)

$47,500

Please show work. Thanks!

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions