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Marginal profit

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Reference no: EM13917887

CMR Refrigeration makes a compressor part that it sells for $35 each. The cost of producing 30,000 parts in the prior year is as follows:

Direct material                                    $230,000

Direct labor                                           90,000

Variable overhead                                  140,000

Fixed overhead                                     130,000

Total cost                                           $590,000

At the first of the current year, CMR received an order for 3,000 parts from a company in Mexico. If the Mexican company is only willing to pay $27 for the part and CMR has excess capacity, should CMR accept the order? What will be the marginal profit if any? (Show your computations

Reference no: EM13917887

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