What will be the real effect on profit for kennel metal work

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Kennel Metal Works received an offer from a big-box retail company to purchase 3,240 metal outdoor tables for $232 each. Kennel Metal Works accountants determine that the following costs apply to the tables:

Direct material $142
Direct labor 54
Manufacturing overhead 76
Total $272

Of the $76 of overhead, $15 is variable and $61 relates to fixed costs. The $61 of fixed overhead is allocated as $1.18 per direct labor dollar.

Problem 1: What will be the real effect on profit if the order is accepted?

Reference no: EM132949351

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