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Portland Industries manufactures a product with the following costs per unit at the expected production of 30,000 units: Direct materials $ 10 Direct labor $
Portland Industries manufactures a product with the following costs per unit at the expected production of 30,000 units:
Direct materials | $ 10 |
Direct labor | $ 15 |
Variable manufacturing overhead | $ 8 |
Fixed manufacturing overhead (allocated common costs) | $ 10 |
The company has the capacity to produce 60,000 units. The product regularly sells for $45. A new potential customer has offered to purchase 2,000 units for $30 each.
What is the financial advantage (disadvantage) if Portland Industries accepts the special order?
Financial disadvantage of ($26,000)
Financial advantage of $60,000
Financial advantage of $10,000
Financial disadvantage of ($6,000)
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