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show all calculations Eley Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal
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Eley Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 45,000 units per month is as follows: $45.10 $8.60 $1.60 $18.30 $2.80 $13 Direct materlals Direct labor Varlable manufacturing overhead Flxed manufacturing overhead Varlable selling & administrative expense Flxed selling & administrative expense The normal selling price of the product is $96.10 per unit. An order has been recelved from an overseas customer for 2,500 unlts to be delilvered thls month at a speclal discounted price. This order would have no effect on the company's normal sales and would not change the total amount of the company's fixed costs. The varlable selling and administrative expense would be $1.70 less per unit on thls order than on normal sales. Direct labor is a varlable cost In this company Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the speclal order Is $81.40 per unit By how much would thls special order Increase (decrease) the company's net operating Income for the monthStep by Step Solution
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