Humes corporation makes a range of products the companys

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Reference no: EM13378622

Humes Corporation makes a range of products. The company's predetermined overhead rate is $16 per direct labor-hour, which was calculated using the following budgeted data:

1075_Impact on the companys overall profit.png

Management is considering a special order for 700 units of product J45K at $64 each. The normal selling price of product J45K is $75 and the unit product cost is determined as follows:

602_Impact on the companys overall profit1.png

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 additional units. Assume that direct labor is a variable cost, variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by the special order.

Required:

If the special order were accepted, what would be the impact on the company's overall profit?

Reference no: EM13378622

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