Eley Corporation produces a single product. The cost of producing and selling a single unit...
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Eley Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 40,000 units per month is as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling & administrative expense Fixed selling & administrative expense $56.4 $12.8 $2.2 $24.4 $2.7 $9.4 The normal selling price of the product is $114.5 per unit. An order has been received from an overseas customer for 1,800 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $2.1 less per unit on this order than on normal sales. Direct labor is a variable cost in this company. Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $105.2 per unit. By how much would this special order increase (decreasel the company's net operating income for the month? $(13,240) $(25,240) O $25,160 $59,760
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