Question
Waterloo Co. sells product P-14 at a price of $48 a unit. The per-unit cost data are direct materials $15, direct labour $10, and overhead
Waterloo Co. sells product P-14 at a price of $48 a unit. The per-unit cost data are direct materials $15, direct labour $10, and overhead $12 (75% variable). Waterloo Co. has no excess capacity to accept a special order for 38,800 units, but at a discount of 25% from the regular price. Selling costs associated with this order would be $4 per unit. Determine whether Waterloo Co. should accept the special order. (Enter loss with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Incremental income (loss) = Waterloo should accept?
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