Question
Travers Company is contemplating the acceptance of a special order has the following unit cost behavior, based on 10,000 units (the total capacity of their
Travers Company is contemplating the acceptance of a special order has the following unit cost behavior, based on 10,000 units (the total capacity of their factory). Travers Company is presently manufacturing 7000 units in their factory. Direct Materials $10 Direct Labor $9 Variable Overhead $8 Fixed Overhead $6 Poppins Company wants to purchase 2,000 units at a special unit price of $35. The normal price per unit is $40. In addition, a special stamping machine will have to be purchased for $6,054 in order to stamp the companys logo on the product. What is the amount of the incremental income (loss) from accepting the order?
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