8. Plgrim Corporation makes a range of products. The company\'s predeternined ov

Question

8. Plgrim Corporation makes a range of products. The company's predeternined overhead rate is $23 per direct labor-hour, which was calculated using the following budgeted data Variable manufacturing overhead S 48,000 Fixed manufacturing overhead$320,000 Direct labor-hours 16,000 Management is considering a special order for 650 units of product N89E at $59 each. The normal selling price of product N89E is $70 and the unit product cost is determined as follows Direct materials Direct labor Manufacturing overhead applied $32.00 11.00 23.00 Unit product cost $ 66.00 If the special order were accepted normal sales of this and other products would not be affected. The company has ample excess capacity to produce the additional units. Assume that direct labor is a variable cost, variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by the special order Required: If the special order were accepted what would be the impact on the company's overall proft? (Input the amount as a positive value. Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount) in profit Total

Explanation / Answer

Per unit 650 units Revenue 59 38350 Incremental costs: Direct materials 32 20800 Direct labor 11 7150 Variable manufacturing overhead 3 1950 Incremental profit 8450 Total increase in profit $8450

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