How much is the incremental profit

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Reference no: EM132815973

Question - Bell Supply House produces recycled paper that it sells by the case. Budgeted amounts for the coming year are as follows:

Revenues (20,000 cases at $12 each) $240,000

Direct material $40,000

Direct labor 70,000

Variable manufacturing overhead 50,000

Fixed manufacturing overhead 30,000 190,000

Net income $50,000

LTS Enterprises has offered to purchase 2,000 cases of the paper from Bell at a price of $12.50 per case. This special order will have additional variable costs of $0.35 per case due to delivery costs. Bell Supply House has the capacity to produce this order and it will not affect any of its other operations. How much is the incremental profit (loss) associated with the special order?

Reference no: EM132815973

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