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TarjeeMetal Works received an offer from a big-box retail company to purchase3,420metal outdoor tables for $244each.TarjeeMetal Works accountants determine that the following costs apply to
TarjeeMetal Works received an offer from a big-box retail company to purchase3,420metal outdoor tables for $244each.TarjeeMetal Works accountants determine that the following costs apply to the tables:
Direct material$151
Direct labor57
Manufacturing overhead80
Total$288
Of the $80of overhead, $16is variable and $64relates to fixed costs. The $64of fixed overhead is allocated as $1.24per direct labor dollar.
What will be the real effect on profit if the order is accepted?
The profit will increase or decrease? by $ ?
.
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