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What will be the effect on profit of accepting the order? PowerDrive, Inc. produces a hard disk drive that sells for $175 per unit. The
What will be the effect on profit of accepting the order?
PowerDrive, Inc. produces a hard disk drive that sells for $175 per unit. The cost of producing 25,000 drives in the prior year was: Direct $625,000 material Direct 375,000 labor Variable 125,000 overhead Fixed 1,500,000 overhead Total $2,625,000 cost At the start of the current year, the company received an order for 3,000 drives from a computer company in China. Management of PowerDrive has mixed feelings about the order. On the one hand they welcome the order because they currently have excess capacity. Also, this is the company's first international order. On the other hand, the company in China is willing to pay only $130 per unit. What will be the effect on profit of accepting the orderStep by Step Solution
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