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A customer has requested that LCorporation fill a special order for 2,800 units of product R35 for $32 a unit.
$15.00
The normal selling price of the product is $100.10 per unit. An order has been received from an overseas customer for 2,700 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 $1.90 less per unit on this order than on normal sales.
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 $83.40 per unit. The monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be:
Multiple Choice
- ($43,000)
- $18,090
- ($27,540)
- $68,580
