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Homework answers / question archive / Glade Company produces a single product
Glade Company produces a single product. The cost of producing and
selling one unit at the current activity level of 8,000 units per month is as follows:
Direct materials $2.50
Direct labour $3.00
Variable manufacturing overhead $0.50
Fixed manufacturing overhead $4.25
Variable selling and administrative expenses $1.50
Fixed selling and administrative expenses $2.00
The normal selling price is $16 per unit and the monthly capacity is 10,000 units. An order has been received from an overseas customer for 1,500 units at a price of $12 per unit. No additional costs will be incurred to meet this order.
Should this order be accepted?
