Calculate the contribution to profit from the special order

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Reference no: EM131914516

Problem

Miko Company manufactures a personal computer designed for use in schools and markets it under its own label. Miko has the capacity to produce 37,000 units a year but is currently producing and selling only 17,000 units a year. The computer's normal selling price is $1,770 per unit with no volume discounts. The unit-level costs of the computer's production are $580 for direct materials, $230 for direct labor, and $150 for indirect unit-level manufacturing costs. The total product- and facility-level costs incurred by Miko during the year are expected to be $2,180,000 and $818,000, respectively. Assume that Miko receives a special order to produce and sell 3,070 computers at $1,210 each.

Required:

a. Calculate the contribution to profit from the special order.

Reference no: EM131914516

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