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Franklin Company uses activity-based costing, and normally produces 1,000,000 units per month. At this level...

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Accounting

Franklin Company uses activity-based costing, and normally produces 1,000,000 units per month. At this level of production, the costs per unit are as follows: Direct materials used $14 Direct labor $6 Variable indirect production $1 Setup costs $3 For 1,000,000 units, 500 setups are required at a cost of $6,000 per setup. The company has received a special order for 100,000 units at $22 per unit. The company has excess capacity. The company estimates that 5 setups will be required for the special order. What is the cost of the special order?

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