Compute the amount of the operating income


Response to the following problem:

Stangle Company manufactures ties. When 28,000 ties are produced, the costs per unit are: Direct materials $0.60 Direct manufacturing labor 3.00 Variable manufacturing overhead 1.20 Fixed manufacturing overhead 1.60 Variable selling 0.80 Fixed selling 1.13 The ties normally sell for $22 each. The company has received a special order for 2,000 ties at $10.00 per tie. The company has excess capacity.

Required: Compute the amount by which the operating income would change if the order were accepted.

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Financial Accounting: Compute the amount of the operating income
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