NUBD Co. budgeted sales of 400,000 calculators at P40 for 2021. Variable manufacturing costs were budgeted at P16 per unit, and fixed manufacturing costs at P10 per unit. A special order offering to buy 40,000 calculators for P23 each was received by NUBD Co. in October 2021. NUBD Co. has sufficient plant capacity to manufacture the additional quantity; however, the production would have to be done on an overtime basis at an estimated additional cost of P3 per calculator. Acceptance of the special order will not affect NUBD's normal sales and no selling expenses would be incurred. What would be the effect on operating profit (loss) if the special order were accepted? *
NUBD Co. budgeted sales of 400,000 calculators at P40 for 2021. Variable manufacturing costs were budgeted at P16 per unit, and fixed manufacturing costs at P10 per unit. A special order offering to buy 40,000 calculators for P23 each was received by NUBD Co. in October 2021. NUBD Co. has sufficient plant capacity to manufacture the additional quantity; however, the production would have to be done on an overtime basis at an estimated additional cost of P3 per calculator. Acceptance of the special order will not affect NUBD's normal sales and no selling expenses would be incurred. What would be the effect on operating profit (loss) if the special order were accepted? *
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 13CE: Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead...
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