Bertans has received a special order for 4,700 units of its product at a special

Question

Bertans has received a special order for 4,700 units of its product at a special price of $23. The product normally sells for $32 and has the following manufacturing costs: er unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit cost 4 $ 17 Assume that Bertans' production is at full capacity. If Bertans accepts the order, what effect will the order have on the company's short-term profit? If a decrease, place a - sign before your answer. For example, a decrease of $1,000 would be answered -1,000

Explanation / Answer

Bertan's production is at full capacity, so the demand is equal to existing production, any decrease in selling price would result into derease in profit.

Special order in units      4,700 Decrese in selling price 32-23              9 Decrese in profit -42,300

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