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Homework answers / question archive / Handley Metal Works received an offer from a big-box retail company to purchase 3,000 metal outdoor tables for $216 each

Handley Metal Works received an offer from a big-box retail company to purchase 3,000 metal outdoor tables for $216 each

Accounting

Handley Metal Works received an offer from a big-box retail company to purchase 3,000 metal outdoor tables for $216 each. Handley Metal Works accountants determine that the following costs apply to the tables:

 

Direct material$130Direct labor50Manufacturing overhead70Total$250

 

Of the $70 of overhead, $14 is variable and $56 relates to fixed costs. The $56 of fixed overhead is allocated as $1.10 per direct labor dollar.

 

(a) What will be the real effect on profit if the order is accepted?

 

The profit will increase or decrease

 by= $. enter a dollar amount

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