university of california Operations And Supply Chain Management Assignment Help - accounting homework

Question - PROBLEM #3 %u2013 SPECIAL ORDER
Wagner Company sells Product A for $21 per unit. If Wagner operates at full production capacity of
200,000 units, its manufacturing cost per unit are as follows:
Direct materials $4.00
Direct labor 5.00
Overhead, 2/3 of which is fixed 6.00
Total $15.00
A special order for 20,000 units was received from a foreign distributor. The foreign distributor offered
$14.50 per unit. The only selling costs on this order would be $3.00 per unit for shipping. Wagner has
sufficient capacity to manufacture the additional units. Fixed overhead costs would not be affected if
the special order is accepted.
Required: (1) Compute the gain or loss if the customer%u2019s offer is accepted. (2) Calculate the
price per u ...Read More nit at which the special order would generate a $20,000 profit before taxes. ...Read Less

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