Answered: Direct materials.. Direct labor.....…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter15: Introduction To Managerial Accounting

Section: Chapter Questions

Problem 3CMA: A firm has 100,000 in direct materials costs, 50,000 in direct labor costs, and 80,000 in overhead....

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A company receives a special order for 200 units that requires stamping the buyer’s name on each unit, yielding an additional fixed cost of $400. Without the order, the company operates at 75% of capacity and produces 7,500 units of product at the costs below. The company’s normal selling price is $22 per unit. The requested sales price for the special order is $18 per unit. The special order will not affect normal unit sales and will not increase fixed over head or fixed selling expenses. Variable selling expenses on the special order are reduced to one-half the normal amount. Should the company accept the special order?

Direct materials..
Direct labor.....
Overhead (30% variable) ....
$37,500
60,000
20,000
Selling expenses (60% variable) .
25,000

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