Rose Manufacturing Company had the following unit costs: $\begin{array}{lr}
\text { Direct materials } & \$ 24 \
\text { Direct labour } & 8 \
\text { Variable factory overhead } & 10 \
\text { Fixed factory overhead (allocated) } & 18
\end{array}$ A one-time customer has offered to buy 2,000 units at a special price of $48 per unit.Assume that sufficient unused production capacity exists to produce the order and no regular customers will be affected by the order.How much additional profit (loss)will be generated by accepting the special order?
A) a $84,000 loss
B) a $24,000 loss
C) a $12,000 profit
D) a $96,000 profit

Question

Quizplus · Accepted Answer

The relevant costs for the special order are direct materials, direct labor, and variable factory overhead, totaling $42 per unit. The special price is $48 per unit, resulting in a profit of $6 per unit. For 2,000 units, the additional profit is $12,000.

Rose Manufacturing Company Had the Following Unit Costs A One-Time Customer Has Offered to Buy 2,000 Units at Direct