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What is the effect on net income

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Reference no: EM133177840

Question - Missoula Industries manufactures a product with the following costs per unit at the expected production of 30,000 units:

Direct materials $5

Direct labor $15

Variable manufacturing overhead $8

Fixed manufacturing overhead $6

The company has the capacity to produce 60,000 units. The product regularly sells for $45. A new potential customer has offered to purchase 2,000 units for $40 each.

Required -

a. What is the effect on net income, if Missoula Industries accepts the special order?

b. List 2 QUALITATIVE items that should be considered beyond the computational analysis. Be concise, please.

Reference no: EM133177840

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