Question
Your Company produces a single product. The cost of producing and selling a single unit of this product is as follows: Direct materials $18.00 Direct
Your Company produces a single product. The cost of producing and selling a single unit of this product is as follows:
Direct materials | $18.00 |
Direct labor | $6.80 |
Variable factory overhead | $2.40 |
Fixed factory overhead | $11.60 |
Variable selling expense | $1.90 |
Fixed selling expense | $5.10 |
Original cost per unit | $45.80 |
An order has been received from an overseas customer for 2,000 units to be delivered this month at a special discounted price of $41.60 per unit. If the special order is accepted, variable selling costs would decrease by 45%. The customer wants the item to be engraved. This involves an additional $1.50 of direct labor per unit. The company will also need to purchase an engraving machine for $20,000. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, what is the impact on the company's overall net operating income?
Group of answer choices
$24,090
$7,090
$4,090
$6,710
$23,710
$3,710
please solve will like
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started