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Part II Problem 1 (Total 15 points): company contemplating the acceptance of a special order has the following unit cost behavior, based on 10,000 units:
Part II Problem 1 (Total 15 points): company contemplating the acceptance of a special order has the following unit cost behavior, based on 10,000 units: Direct materials 5 Direct labor Variable overhead 9 Fixed overhead8 15 A foreign company wants to purchase 3,000 units at a special unit price of $26. The norma price per unit is $40. In addition, a special stamping machine will have to be purchased for $4,000 in order to stamp the foreign company's name on the product Questions: a) What is the incremental income (loss) from accepting the order? (10 points) b) Should the Company accept the special order? Why or why not? (5 points)
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