Business, 15.04.2020 00:17 bri6517

He following information relates to the unit product cost for a product manufactured by Creamer Company:

Direct materials $24
Direct labor 15
Variable overhead 30
Fixed overhead 18
Unit cost $87

In addition, fixed selling costs are $500,000 per year, and variable selling costs are $12 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for $120 each. A customer has offered to buy 60,000 units for $90 each.

If the firm produces the special order, the effect on income would be a(n):

Answers: 3

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