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(TCO 5) The following information relates to a product produced by Bayfield - Academic Heroes

(TCO 5) The following information relates to a product produced by Bayfield

(TCO 4) Kramer Company has decided to use a predetermined rate to assign factory
February 11, 2020
John, a cost accountant, prepares a product profitability report for Jane, the
February 11, 2020

(TCO 5) The following information relates to a product produced by Bayfield

Company:

Direct materials

$50

Direct labor

35

Variable overhead

30

Fixed overhead

40

Unit cost

$155

Fixed selling costs are $1,000,000 per year. Although production capacity is 900,000 units per year, Bayfield expects to produce only 800,000 units next year. The product normally sells for $180 each. A customer has offered to buy 60,000 units for $150 each. Compute the effect on the net income if Bayfield accepts the special order.

 
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