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What will be the real effect on profit

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Reference no: EM132978177

Question - Pembina Metal Works received an offer from a big-box retail company to purchase 3,360 metal outdoor tables for $240 each. Pembina Metal Works accountants determine that the following costs apply to the tables:

Direct material $148

Direct labor 56

Manufacturing overhead 79

Total $283

Of the $79 of overhead, $16 is variable and $63 relates to fixed costs. The $63 of fixed overhead is allocated as $1.22 per direct labor dollar.

Required - What will be the real effect on profit if the order is accepted?

Reference no: EM132978177

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