Recently a company approached rippey corporation about

Assignment Help Accounting Basics

Reference no: EM13596284

Rippey Corporation manufactures a single product witht he following unit costs for 5,000 units:

Direct materials: 60
Direct labor: 30
Factory overhead (40% variable): 90
Selling expense (60% variable): 30
Administrative expenses (20% variable) 15
Total per unit: 225

Recently, a company approached Rippey Corporation about buying 1,000 units for $225. Currently, the Models are sold to dealers for $412.50. Rippey's capacity is sufficient to produce the extra 1,000 units. Ne additional selling expenses would be incurred on the special order.

Required:

Should Rippey accept the special order if its goal is to maximize short-run profits?
How much will income be affected if Rippey accepts the special order?

Reference no: EM13596284

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