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Question - Expresso Metal Works received an offer from a big-box retail company to purchase 3,660 metal outdoor tables for $260 each. Espresso Metal Works accountants determine that the following costs apply to the tables:
Direct Material $163
Direct Labor $61
Manufacturing overhead $86
Total $310
Of the $86 overhead, $17 is variable and $69 relates to fixed costs. The $69 of fixed overhead is allocated as $1.32 per direct labor dollar. What will be the real effect on profit if the order is accepted?
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