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Analyzing a Special order

Analyzing a Special order
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Price: $9.99
Availability: In Stock
Model: A
Average Rating: 5 out of 5 Stars!

Analyzing a Special order: PowerDrive, Inc produces a hard disk drive that sells for $175 per unit. The cost of producing 25,000 drives (units) in the prior year was: Direct material $625,000 Direct labor $375,000 Variable Overhead $125,000 Fixed Overhead $,1500,000 Total Cost $2,625,000 At the start of the current year, the company received an order of 3,000 drives from a computer company in China. Management of PowerDrive has mixed feelings about the order. On one hand they welcome the order because they currently have excess capacity. Also, this is the company’s first international order. On the other hand, the company in China, is willing to pay only $125 per unit. Required: What will be the effect on profit of accepting the order? NOTE: This question is NOT our property; we are only suggesting solution of this question.

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