Question
WallaWallaMetal Works received an offer from a big-box retail company to purchase3,540metal outdoor tables for $252each.WallaWallaMetal Works accountants determine that the following costs apply to
WallaWallaMetal Works received an offer from a big-box retail company to purchase3,540metal outdoor tables for $252each.WallaWallaMetal Works accountants determine that the following costs apply to the tables:
Direct material$157 Direct labor59 Manufacturing overhead82 Total$298
Of the $82of overhead, $16is variable and $66relates to fixed costs. The $66of fixed overhead is allocated as $1.28per direct labor dollar.
(a)What will be the real effect on profit if the order is accepted?
The profit will
select an option
increase
decrease
by $
enter a dollar amount
.
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