Essay
A customer has asked Lalka Corporation to supply 3,000 units of product H60,with some modifications,for $34.70 each.The normal selling price of this product is $46.35 each.The normal unit product cost of product H60 is computed as follows:
Direct labor is a variable cost.The special order would have no effect on the company's total fixed manufacturing overhead costs.The customer would like some modifications made to product H60 that would increase the variable costs by $3.80 per unit and that would require a one-time investment of $24,000 in special molds that would have no salvage value.This special order would have no effect on the company's other sales.The company has ample spare capacity for producing the special order.
Required:
Determine the financial advantage or disadvantage of accepting the special order.Show your work!
Correct Answer:
Verified
Correct Answer:
Verified
Q43: Elfalan Corporation produces a single product. The
Q44: Supler Corporation produces a part used in
Q46: Younes Inc. manufactures industrial components. One of
Q48: Gordon Corporation produces 1,000 units of a
Q49: Farrugia Corporation produces two intermediate products,A and
Q51: Boney Corporation processes sugar beets that it
Q52: Gottshall Inc.makes a range of products.The company's
Q60: Opportunity costs represent costs that can be
Q112: A joint product is:<br>A) any product which
Q231: In a decision to drop a product,