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Jerry Containers manufactures Containers for the packaging industry. The Aluminium sheets are produced in the Sheets Division. The sheets are then transferred to the Container Division where the Sheets are further processed, cut and Containers are prepared. Each sheet of Aluminium from the Sheets division will make one Container after further processing. The standard cost of the finished Container is detailed as follows:
Sheets Division Container Division
Direct Material $5 $7
Direct Labour $6 $4
Variable overhead $7 $9
Total Standard cost $18 $20
Question 1: From the perspective of Jerry containers as a whole, the special order would lead to:
Select one:
a. Benefit $33,000
b. Benefit $3,000
c. Loss $33,000
d. Loss $3,000
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