Question
The Minton Company has gathered the following information for a unit of its most popular product: Direct materials $ 10 Direct labor 2 Overhead (50%
The Minton Company has gathered the following information for a unit of its most popular product: Direct materials $ 10 Direct labor 2 Overhead (50% variable) 6 Cost to manufacture 18 Desired markup (50%) 9 Target selling price $ 27 The above cost information is based on 5,600 units. A foreign distributor has offered to buy 2,600 units at a price of $21 per unit. This special order would not disturb regular sales. Variable shipping and other selling expenses would be an additional $1 per unit for the special order. If the special order is accepted, Minton's operating profits will increase by:
Multiple Choice
$5,200.
$6,500.
$7,800.
$13,000.
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