Question
TB MC Qu. 11-113 (Algo) Elfalan Corporation produces a single product... Elfalan Corporation produces a single product. The cost of producing and selling a single
TB MC Qu. 11-113 (Algo) Elfalan Corporation produces a single product... Elfalan 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 59,000 units per month is as follows: Per Unit Direct materials $ 52.10 Direct labor $ 10.00 Variable manufacturing overhead $ 3.00 Fixed manufacturing overhead $ 21.10 Variable selling & administrative expense $ 5.60 Fixed selling & administrative expense $ 27.00 The normal selling price of the product is $124.10 per unit. An order has been received from an overseas customer for 3,900 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $3.10 less per unit on this order than on normal sales. Direct labor is a variable 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 special order is $95.40 per unit. The monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be:
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