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

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Reference no: EM132898389

Question - WallaWalla Metal Works received an offer from a big-box retail company to purchase 2,400 metal outdoor tables for $176 each. WallaWalla Metal Works accountants determine that the following costs apply to the tables:

Direct material $100

Direct labor 40

Manufacturing overhead 56

Total $196

Of the $56 of overhead, $11 is variable and $45 relates to fixed costs. The $45 of fixed overhead is allocated as $0.90 per direct labor dollar.

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

Reference no: EM132898389

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