Solution-Find how much is effect on the company total net

Find how much is effect on the company total net operating

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Reference no: EM132719984

Tullis Corporation has received a request for a special order of 8,000 units of product for $50.00 each. Normal selling price of this product is $53.25 each, but the units would need to be modified for the customer.

The normal unit product cost of the product is:

Direct materials $18.10
Direct labor 7.40
Variable manufacturing overhead 5.20
Fixed manufacturing overhead 4.80
Unit production cost $35.50

Direct labor is variable cost. The special order has no effect on total fixed manufacturing overhead costs. The modifications to the product would increase variable costs by $5.00 per unit and require a one-time investment of $43,000 in special molds with no salvage value. The special order wouldn't effect other sales.

Problem 1: How much is the effect (incremental net operating income) on the company's total net operating income through accepting the special order?

Reference no: EM132719984

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Find how much is effect on the company total net operating

Reference no: EM132719984

Reference no: EM132719984

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