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Field Co. has the capacity to produce 20,000 pairs of hiking boots each month. The...

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Accounting

Field Co. has the capacity to produce 20,000 pairs of hiking boots each month. The current operating budget calls for the monthly sales production of only 16,000 pairs of boots at $150 per pair. Cost per unit at the 16,000 level of production is:

Direct materials

40.00

Direct labor

25.00

Variable manufacturing overhead

20.00

Fixed manufacturing overhead

17.50

Variable marketing expense

5.00

Fixed marketing expense

12.50

Cost per unit

$120.00

An international customer approached Field Co. with an offer to buy 2,000 pairs of boots at a price of $95.00 per pair. Should Field Co. accept the special order? (Please show all work and equations used)!

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