This paper circulates around the core theme of Tullius Corporation has received a request for a special order of 8,000 units of product C64 for $50.00 each. The normal selling price of this product is $53.25 each, but the units would need to be modified slightly for the customer. How much is the “ef together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
Tullius Corporation has received a request for a special order of
8,000 units of product C64 for $50.00 each. The normal selling price of
this product is $53.25 each, but the units would need to be modified
slightly for the customer. The normal unit product cost of product C64
is computed as follows:
Direct materials $18.10
Direct labor 7.40
Variable manufacturing overhead 5.20
Fixed manufacturing overhead 4.80
Unit product cost $35.50
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 some modifications made to product C64 that would
increase the variable costs by $5.00 per unit and that would require a
one-time investment of $43,000 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.
Required:
How much is the “effect” (incremental net operating income) on the
company’s total net operating income through accepting the special
order?
