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What is the effect on net income

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Question - Mission Industries manufactures a product with the following costs per unit at capacity of 30,000 units.

Direct materials $5

Direct labor $15

Variable manufacturing overhead $8

Fixed manufacturing overhead $6

The company is currently operating at capacity (they cannot produce more than 30,000 units). The product regularly sells for $45. A wholesaler has offered to pay $40 each for 2,000 units.

What is the effect on net income, if Mission Industries accepts the special order?

Reference no: EM132103785

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