Capitol has received a special order for 2,050 units of its product at a special price of $155. The product normally sells for $205 and has the following manufacturing costs: Direct materials Direct tabor Variable manufacturing overhead Fixed manufacturing overhead Unit cost Per unit $ 55 35 25 45 $160 Assume that Capitol has sufficient capacity to fill the order without harming normal production and sales and all fixed overhead is unavoidable. a, If Capitol accepts the order, what effect will the order have on the company's short-term profit?

Capitol has received a special order for 2,050 units of its product at a special price of $155. The product normally sells for $205 and has the following manufacturing costs: Direct materials Direct tabor Variable manufacturing overhead Fixed manufacturing overhead Unit cost Per unit $ 55 35 25 45 $160 Assume that Capitol has sufficient capacity to fill the order without harming normal production and sales and all fixed overhead is unavoidable. a, If Capitol accepts the order, what effect will the order have on the company's short-term profit?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 6P

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