Question

Pilgrim Corporation makes a range of products. The company's predetermined overhead rate is $25 per direct labor-hour, which was calculated using the following budgeted at Variable manufacturing overhead Fixed manufacturing overhead Direct labor-hours 75,000 300,000 15,000 Management is considering a special order for 790 units of product NBSE at $73 each. The normal selling price of product N9E is $84 and the unit product cost is determined as fotos $ 45.00 Direct materials Direct labor Manufacturing overhead applied Unit product cost S8600 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 actional units. Assume that direct labore variable cost, variable manufacturing overhead is really driven by direct labor-hours, and total oed manufacturing overhead would not be afected by the special order Required: If the special order were accepted what would be the impact on the company's overal profit? (input the amount as a positive value. Round your intermediate calculations to and final answer to the nearest dollar amount.) be places Prolit

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Н 1 Answer In the given question we have to calculate the impact of special order on profit 2 3 4 Impact on Profit Revenue from offer Relevant cost for offer 5(790*73)- ((46+17+(75000/15000)) *790) 6 = 57670-53720 7 $3950 9 Thus the overall profit will increase by $3950 10 11 The correct answer is $ 3950 12 13 14