Answered: what is the impact on the companies…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 4MC: Overhead costs are assigned to each product based on __________________. A. the proportion of that...

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your corporation has received a request for a special order of 6000 units of its product for $16 each. The product unit cost is as follows:(see attached image). The special order would have no effect on the companies total fixed manufacturing overhead cost. If the special order is excepted variable selling cost would decrease by 60%. The special order would have no effect on the companies other sales. The company has ample spare capacity for producing the special order. If the special order is excepted, what is the impact on the companies overall net operating income? a) $13,920 b) $9,600 c) $16,080 d) $20,400

Direct materials.. .
$6.10
Direct labor....
4.20
Variable manufacturing overhead. .
2.30
Fixed manufacturing overhead...
3.60
Variable selling expense
1.80
Fixed selling expense..
1.20
$19.20
Total cost per unit

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