Glascro Manufacturing Company had the following unit costs:
A one-time customer has offered to buy 3,000 units at a special price of $60 per unit.Assuming that sufficient unused production capacity exists to produce the order and no regular customers will be affected by the order, how much additional profit or loss will be generated by accepting the special order?
A) $45,000 profit
B) $22,000 profit
C) $36,000 loss
D) $57,000 loss

Question

Glascro Manufacturing Company had the following unit costs: 
 A one-time customer has offered to buy 3,000 units at a special price of $60 per unit.Assuming that sufficient unused production capacity exists to produce the order and no regular customers will be affected by the order, how much additional profit or loss will be generated by accepting the special order?
A) $45,000 profit 
B) $22,000 profit 
C) $36,000 loss 
D) $57,000 loss

Quizplus · Accepted Answer

Variable cost per unit = Direct materials per unit + Direct labor per unit + Variable overhead per unit = $20 + $10 + $15 = $45
Additional profit = Number of units sold × (Selling price - Variable cost)
Additional profit = 3,000 units × ($60- $45) = $45,000

Glascro Manufacturing Company Had the Following Unit Costs