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TB MC Qu. 13-136 (Algo) Elfalan Corporation produces a single product... Elfalan Corporation produces a single product. The cost of producing and selling a
TB MC Qu. 13-136 (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 48,000 units per month is as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling & administrative expense Fixed selling & administrative expense The normal selling price of the product is $102.10 per unit. Per Unit $ 46.60 $ 8.90 $ 1.90 $ 18.90 $ 3.40 $ 16.00 An order has been received from an overseas customer for 2,800 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 $2.00 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 $84.40 per unit. The monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be:
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