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Question 8 GHJ company makes a series of products. The predetermined overhead rate is $16 per direct laborhour, which was calculated using the related budgeted
Question 8 GHJ company makes a series of products. The predetermined overhead rate is $16 per direct laborhour, which was calculated using the related budgeted data: Now the company is considering a special order for 580 units of product Y at $52 each. The normal selling price of product Y is $63, and the unit product cost is determined as follows: If the company decides to accept a special order, normal sales of this and other products will not be affected. Moreover, the company has sufficient capacity to produce additional products. Assume that direct labor is a variable cost, variable manufacturing overhead is really driven by direct laborhours, and total fixed manufacturing overhead would not be affected by the special order. Required: What is the financial advantage or disadvantage for the company as a result of accepting this special order? Show your calculations
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