Special Order Review company has the following information relating to their plastics factory Current Selling Price $10.00 Current...

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Accounting

Special Order Review company has the following informationrelating to their plastics factory
Current Selling Price $10.00
Current Monthly Production 15,000 units
Total Direct Materials ( all Variable) $45,000.00
Total Direct Labor (all variable) $15,000.00
Total Overhead (50% variable) $50,000.00
Total Marketing Cost (75% variable) $30,000.00
A new customer has offered to buy 3000 units but will pay only$7.50. The special order will incur additional costs of $1.50 perunit but there will be no additional marketing costs paid.
REQUIRED: 1. Calculate the current variable cost per unit andfixed cost.
2. Calculate the gain or loss on the special order

Answer & Explanation Solved by verified expert

4.3 Ratings (602 Votes)

Current Monthly Production is 15000 Units Total Direct Material Cost is 45000 Variable Cost per Unit of DIrect Materials 4500015000 U 3 Per Unit Total Direct Labour Cost is 15000 Variable Cost per Unit of DIrect Labour 1500015000 U 1 Per Unit Total See Answer

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