Question

Capitol has received a special order for 2,080 units of itsproduct at a special price of $158. The product normally sells for$208 and has the following manufacturing costs: Per unit Directmaterials $ 58 Direct labor 38 Variable manufacturing overhead 28Fixed manufacturing overhead 48 Unit cost 172 Assume that Capitolhas sufficient capacity to fill the order without harming normalproduction and sales and all fixed overhead is unavoidable. a. IfCapital accepts the order, what effect will the order have on thecompany’s short-term profit? b. What minimum price should Capitalcharge to achieve a $48,000 incremental profit? (Round your answerto 2 decimal places.) c. Now assume Capital is currently operatingat full capacity and cannot fill the order without harming normalproduction and sales. If Capitol accepts the order, what effectwill the order have on the company’s short-term profit?