ACCT 224-The following information relates to a product

by | Mar 18, 2020 | Uncategorized

  

4. The following information relates to a product produced by Bayfield
Company:
Direct materials

50

Direct labor

35

Variable overhead

30

Fixed overhead

40

Unit cost

155

Fixed selling costs are $1,000,000 per year. Although production
capacity is 900,000 units per year, Bayfield expects to produce only
800,000 units next year. The product normally sells for $180 each. A
customer has offered to buy 55,000 units for $140 each. Compute the
effect on the net income if Bayfield accepts the special order

  

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