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What is the profit to fig company from the special order

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Reference no: EM132523329

Each month Fig Company produces 14,000 units of a product that sells for $20 per unit. At this level of sales, total variable costs amount to $154,000 per month. Total fixed costs for the month are $88,000. A special order is received for 900 units at a selling price of $14 per unit. Fig Company has enough capacity for the special order (on top of its normal production and sales of 14,000 units)

Question 1: Which of the listed costs are relevant and why?

Question 2: If Fig Company accepts the special order, what is the profit to Fig Company from the special order?Justify your final answer by providing your calculations

Reference no: EM132523329

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