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PowerDrive, Inc. produces a hard disk drive that sells for $ 1 7 5 per unit. The cost of producing 2 5 , 0 0
PowerDrive, Inc. produces a hard disk drive that sells for $ per unit. The cost of producing drives in the prior year was:
Direct material $
Direct labor
Variable overhead
Fixed overhead
Total cost $
At the start of the current year, the company received an order for drives from a computer company in China. Management of PowerDrive has mixed feelings about the order. On the one hand they welcome the order because they currently have excess capacity. Also, this is the companys first international order. On the other hand, the company in China is willing to pay only $ per unit.
What will be the effect on profit of accepting the order?
Round to two decimal places.
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