Greek Company produces and sells 22,000 units of a single product. Costs associa

Question

Greek Company produces and sells 22,000 units of a single product. Costs associated with this level of production are as follows: Direct materials $15 Direct manufacturing labor 45 Variable manufacturing overhead 25 Fixed manufacturing overhead 30 Total $114 The product normally sells for $145 per unit. Greek Company has received a special order to sell 2,000 units at $100 per unit. Greek Company has excess production capacity. Compute the amount by which the operating income of Greek Company would change if the order were accepted. Show your work in good form.

Explanation / Answer

30,000 Greek - assuming that product cost includes direct expenses and variable overhead.

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