Business
Business, 31.12.2019 01:31, sbhishop19

Elfalan corporation produces a single product. the cost of producing and selling a single unit of this product at the company's normal activity level of 41,000 units per month is as follows:

per unit
direct materials $ 43.10
direct labor $ 8.20
variable manufacturing overhead
$ 1.20
fixed manufacturing overhead
$ 17.50
variable selling & administrative expense $ 2.00
fixed selling & administrative expense $ 9.00

the normal selling price of the product is $88.10 per unit.

an order has been received from an overseas customer for 2,100 units to be delivered this month at a special discounted price. this order would not change the total amount of the company's fixed costs. the variable selling and administrative expense would be $1.30 less per unit on this order than on normal sales.

direct labor is a variable cost in this company.

suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $77.40 per unit. the monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be:

answer
Answers: 1

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