Question
WallaWallaMetal Works received an offer from a big-box retail company to purchase2,400metal outdoor tables for $176each.WallaWallaMetal Works accountants determine that the following costs apply to
WallaWallaMetal Works received an offer from a big-box retail company to purchase2,400metal outdoor tables for $176each.WallaWallaMetal Works accountants determine that the following costs apply to the tables:
Direct material $100
Direct labor 40
Manufacturing overhead 56
Total $196
Of the $56of overhead, $11is variable and $45relates to fixed costs. The $45of fixed overhead is allocated as $0.90per direct labor dollar.
(a)What will be the real effect on profit if the order is accepted?
The profit will____________________________ by $ _____________________________.?
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