Delilah Incorporated provided the following information regarding its only product: Sale price per unit $50.00 Direct materials used $160,000 Direct labor incurred $185,000 Variable manufacturing overhead $120,000 Variable selling and administrative expenses $70,000 Fixed manufacturing overhead $65,000 Fixed selling and administrative expenses $12,000 Units produced and sold 20,000 units Assume no beginning inventory Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 5,000 units at a sale price of $40 per unit? (NOTE: Assume regular sales are not affected by the special order and all orders incur variable selling and administrative expenses)
Delilah Incorporated provided the following information regarding its only product:
Sale price per unit $50.00
Direct materials used $160,000
Direct labor incurred $185,000
Variable manufacturing overhead $120,000
Variable selling and administrative expenses $70,000
Fixed manufacturing overhead $65,000
Fixed selling and administrative expenses $12,000
Units produced and sold 20,000 units
Assume no beginning inventory
Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 5,000 units at a sale price of $40 per unit? (NOTE: Assume regular sales are not affected by the special order and all orders incur variable selling and administrative expenses)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
