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The following information relates to a product produced by Bayfield Company: Direct materials $70 Direct labor 40 Variable overhead 45 Fixed overhead 50 Unit cost
The following information relates to a product produced by Bayfield Company: Direct materials $70 Direct labor 40 Variable overhead 45 Fixed overhead 50 Unit cost $205 Fixed selling costs are $1,000,000 per year. Although production capacity is 900,000 units per year, Bayfield expects to produce only 800,000 units next year. The product normally sells for $170 each. A customer has offered to buy 60,000 units for $160 each. Compute the effect on the net income if Bayfield accepts the special order.
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