cial Order 8 marks uestion# 2 Bullock Company produces a single product. The cost of...
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cial Order 8 marks uestion# 2 Bullock Company produces a single product. The cost of producing and selling a single i of this product at the company's normal activity level of 70,000 units per month is as follows: $29.60 5.80 $ 2.50 $17.20 $ 1.80 6.70 Direct Materials Direct Labour Variable Manufacturing Overhead Fixed Manufacturing Overhead Variable Selling & Administrative Expense Fixed Selling & Administrative Expense The normal selling price of the product is $72.90 per unit. A Special Order, from an overseas customer, for 2,000 units at a special discounted price ($66.10). This order would have no effect on Bulock's normal sales and Would not change the total amount of Bullock's Fixed costs The Variable Selling and Administrative Expense would be $7.10 less per unit on this order than on normal Sales Required: Suppose there is enough capacity to produce the units required by the overseas customer, and the special discounted price on the special order is $66.10 per unit. a. By how much would this Special Order increase (decrease) the Bullock's Operating Income for the month? (8 marks) Show Work
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