Homework Answers
Answer :
Cost per unit for the special order
= Direct materials cost + Direct labor cost + Variable overhead + variable shipping and selling expenses
= $12 + $3 + ($5*40%) +$1
= $15 +$2 + $1
= $18
Price per unit for special order = $18
Additional profit per unit if the special order is accepted = $24 -$18 =$6
Number of units to be sold = 2,100
Increase in Minton's operating profit = 2,100 * 6 = $12,600
So, first option is correct answer .
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