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Wehrs Corporation has received a request for a special order of 9,700 units of product K19 for $47.20 each. The normal selling price of this product is $52.30 each, but the units would need to be modified slightly for the customer.
The normal unit product cost of product K19 is computed as follows:
Direct materials$18.00
Direct labor 7.30
Variable manufacturing overhead 4.50
Fixed manufacturing overhead 7.40
Unit product cost$37.20
Required:
Question 1: Determine the effect on the company's total net operating income of accepting the special order.
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