Greek Company produces and sells 22,000 units of a single product. Costs associated with this level of production are as follows: $$\begin{array} { l l }
\text { Direct materials } & \$ 15 \
\text { Direct manuf acturing labor } & 45 \
\text { Variable manuf acturing overhead } & 25 \
\text { Fixed manufacturing overhead } & { 3 0 } \
\text { Total } & \underline { \$ 114 }
\end{array}$$ The product normally sells for $145 per unit. Greek Company has received a special order to sell 2,000 units at
$100 per unit. Greek Company has excess production capacity.
Required:
Compute the amount by which the operating income of Greek Company would change if the order were accepted.

Question

Greek Company produces and sells 22,000 units of a single product. Costs associated with this level of production are as follows: $$\begin{array} { l l } 
\text { Direct materials } & \$ 15 \
\text { Direct manuf acturing labor } & 45 \
\text { Variable manuf acturing overhead } & 25 \
\text { Fixed manufacturing overhead } & { 3 0 } \
\text { Total } & \underline { \$ 114 }
\end{array}$$ The product normally sells for $145 per unit. Greek Company has received a special order to sell 2,000 units at
$100 per unit. Greek Company has excess production capacity.
Required:
Compute the amount by which the operating income of Greek Company would change if the order were accepted.

Quizplus · Accepted Answer

The Answer of Greek Company produces and sells 22,000 units of a single product. Costs associated with this level of production are as follows: $$\begin{array} { l l } 
\text { Direct materials } & \$ 15 \
\text { Direct manuf acturing labor } & 45 \
\text { Variable manuf acturing overhead } & 25 \
\text { Fixed manufacturing overhead } & { 3 0 } \
\text { Total } & \underline { \$ 114 }
\end{array}$$ The product normally sells for $145 per unit. Greek Company has received a special order to sell 2,000 units at
$100 per unit. Greek Company has excess production capacity.
Required:
Compute the amount by which the operating income of Greek Company would change if the order were accepted.

Greek Company Produces and Sells 22,000 Units of a Single