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Pharoah, Inc. budgeted 9,000 widgets for production during 2022. Pharoah has capacity to produce 11,000 units. Fixed factory overhead is allocated to production. The
Pharoah, Inc. budgeted 9,000 widgets for production during 2022. Pharoah has capacity to produce 11,000 units. Fixed factory overhead is allocated to production. The following estimated costs were provided: Direct material ($8/unit) $72,000 Direct labor ($16/hr. x 2 hrs./unit) 288,000 Variable manufacturing overhead ($5/unit) 45,000 Fixed factory overhead costs ($6/unit) 54,000 Total $459,000 Cost per unit $51 Pharoah received an order for 900 units from a new customer in a country in which Pharoah has never done business. This customer has offered $48 per widget. Should Pharoah accept the order?
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