What effect will order have on companys short-term profit

Reference no: EM131972009

Problem

Ross has received a special order for 16,000 units of its product at a special price of $19. The product normally sells for $23 and has the following manufacturing costs:

                                               Per unit
Direct materials                                $ 9
Direct labor                                    6
Variable manufacturing overhead      3
Fixed manufacturing overhead          3
Unit cost                                        $ 21

Assume that Ross has sufficient capacity to fill the order. If Ross accepts the order, what effect will the order have on the company's short-term profit?

Reference no: EM131972009

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