Question 4 (of 9) alue: 1.00 points Delta Company produces a single product. The

Question

Question 4 (of 9) alue: 1.00 points Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 93,600 units per year is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses $ 2.00 Fixed selling and administrative expenses 3.00 $ 2.00 $ 4.00 $ .90 $ 3.95 The normal selling price is $23 per unit. The company's capacity is 108,000 units per year. An order has been received from a mail-order house for 1,200 units at a special price of $20.00 per unit. This order would not affect regular sales. Required: 1. If the order is accepted, by how much will annual profits be increased or decreased? (The order will not change the company's total fixed costs.) Annual profits would by MacBook

Explanation / Answer

contribution on special order Special price 20 less Variable expense Direct materials 2 direct labor 4 variable manufacturing overhead 0.9 variable selling & adm expense 2 8.9 contribution on special order 11.1 increase in income = 1200*11.1 13320 Annual profit would increase by $13,320

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.