Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. gallerani corporation has received a request for a

Gallerani Corporation has received a request for a special order of 5,600 units of product...

60.1K

Verified Solution

Question

Accounting

Gallerani Corporation has received a request for a special order of 5,600 units of product A90 for $27.80 each. Product A90's unit product cost is $27.40, determined as follows:

Direct materials $ 3.00
Direct labor 8.30
Variable manufacturing overhead 7.40
Fixed manufacturing overhead 8.70
Unit product cost $ 27.40

Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product A90 that would increase the variable costs by $4.10 per unit and that would require an investment of $20,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be:

A)$8,000

B) $(40,720)

C)$(89,600)

D)$2,240

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Accounting
1.2K views

On December 31, 2017, Sheridan Company acquired a computer fromPlato Corporation by issuing a...

Advance Math
1.2K views

Second order Differential equation: Find the general solution to [ y'' + 6y' +8y = 3e^(-2x)...

Physics
1.2K views

9 In the Young s double slit experiment apparatus shown in figure the ratio of...

Physics
1.2K views

C 2 1 4 21 Figure 4 220 shows a charged particle of mass 2g...

Basic Math
1.2K views

Jake studied thours for a big test Julie studied twice as long Write an algebraic...

Basic Math
1.2K views

5. Note: This is a knowledge of number theory question. Do not use a calculator...

Calculus
1.2K views

Let F(x) = f(x?) and G(x) = (f(x))?.You also know that a? = 8, f(a)...

Accounting
1.2K views

Porter Company acquired all of Sutter, Inc.'s outstanding shares on January 1. Porter...

Accounting
1.2K views

The following data were drawn from the records of Benson Corporation. ...

Accounting
1.2K views

Grace Co. can further process Product B to produce Product C. Product B is currently...

Accounting
1.2K views

Burger Brothers Sports includes in its trial balance for December 31 accounts receivable (one-line item)...

Finance
1.2K views

The common stock of Textile Mills pays an annual dividend of $1.65 a share. The...