8. Montoya Enterprises produces a sword that sells for $200. Although the company's production capacity...
90.2K
Verified Solution
Link Copied!
Question
Accounting
8. Montoya Enterprises produces a sword that sells for $200. Although the company's production capacity is 3,000 swords per year, only 2,500 swords are currently being produced and sold. Humperdinck Corporation has offered to purchase 500 swords as a one-time special purchase at a price of $160 per sword. If the special order is accepted, Montoya Enterprises will have to incur additional fixed costs of $1,000. At Montoya's current level of production (2,500 swords), the Montoya Enterprises incurs the following costs: Direct materials $200,000 Direct labor $100,000 Variable factory overhead $ 50,000 Fixed factory overhead $ 85,000 What will be the impact on Montoya's Enterprises' income if the special order is accepted
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
