Solution-How do determine what effect on profit of

How do determine what effect on profit of accepting order

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Reference no: EM132638543

Bellevue produces a hard disk drive that sells for $174 per unit. The cost of producing 25,000 drives in the prior year was:

Direct material $725,000
Direct labor 475,000
Variable overhead 225,000
Fixed overhead 1,475,000

Total cost $2,900,000
At the start of the current year, the company received an order for 3,040 drives from a computer company in China. Management of Bellevue has mixed feelings about the order. On one hand, they welcome the order because they currently have excess capacity. Also, this is the company's first international order. On the other hand, the company in China is willing to pay only $132 per unit.

Problem 1: What will be the effect on profit of accepting the order? (Enter decrease in profit using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Reference no: EM132638543

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How do determine what effect on profit of accepting order

Reference no: EM132638543

Reference no: EM132638543

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