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

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Reference no: EM132620279

Runner Metal Works received an offer from a big-box retail company to purchase 3,000 metal outdoor tables for $240 each. Runner Metal Works accountants determine that the following costs apply to the tables:

Direct material $130

Direct labor $60

Manufacturing overhead $91

Total $281

Of the $91 of overhead, $13 is variable and $78 relates to fixed costs. The $78 of fixed overhead is allocated as $1.30 per direct labor dollar.

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

Reference no: EM132620279

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