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Compute the incremental income from accepting the order

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Reference no: EM132538657

Question - A company contemplating the acceptance of a special order has the following unit cost behavior, based on 10000 units:

Direct materials $4

Direct labor 10

Variable overhead 8

Fixed overhead 6

A foreign company wants to purchase 2100 units at a special unit price of $25. The normal price per unit is $40. In addition, a special stamping machine will have to be purchased for $4000 in order to stamp the foreign company's name on the product. Compute the incremental income (loss) from accepting the order?

Reference no: EM132538657

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