Please show steps/calculations Elgot Company produces a single product. The cost
ID: 2489177 • Letter: P
Question
Please show steps/calculations
Elgot Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 30,000 units per month is a follows: The normal selling price o f the product is $51.10 per unit. An order has been received from an overseas customer for 3.000 units to be delivered this month at a special discounted price. This order would have no effect on the company's normal sales and would not change the total amount o f the company's fixed costs. The variable selling and administrative expense would be $0.50 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 $44.70 per unit By how much would the special order increase (decrease) the company's net operating income for the month? $5,100 $(14,100) $36,900 $(17,700)Explanation / Answer
Answer:-
Particulars Qty Rate Amount Sales 3000 44.7 134100 Direct Material 3000 20.4 61200 Direct Labour 3000 8.7 26100 variable overhead 3000 1.2 3600 variable Selling & Admin charges 3000 2.1 6300 Total Cost 97200 Profit 36900