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What will be the real effect on profit

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Reference no: EM132944370

Question - Espresso Metal Works received an offer from a big-box retail company to purchase 2,760 metal outdoor tables for $200 each. Espresso Metal Works accountants determine that the following costs apply to the tables:

Direct material $118

Direct labor 46

Manufacturing overhead 65

Total $229

Of the $65 of overhead, $13 is variable and $52 relates to fixed costs. The $52 of fixed overhead is allocated as $1.02 per direct labor dollar. What will be the real effect on profit if the order is accepted?

Reference no: EM132944370

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