Z-Tech produces a single product. The cost of producing and selling a single unit of this product at the

    Z-Tech produces a single product. The cost of producing and selling a single unit of this product at the company’s current activity level of 8,000 units per month is as follows:Cost Per Unit Direct materials . . . . . . . . . . . . . . $2.50Direct labor. . . . . . . . . . . . . . . . . . $3.00Variable manufacturing overhead $0.50 Fixed manufacturing overhead. . $4.25Variable selling & administrative $1.50Fixed selling & administrative. . . $2.00The normal selling price is $15 per unit. The company’s capacity is 10,000 units per month. An order has been received from an overseas source for 2,000 units at t price of $12 per unit. This would would not affect regular sales.Required:If the order is accepted, by how much will monthly profits be increased or decreased? Show your computations. (The order would not change the company’s total fixed costs.)Special Order

    Z-Tech produces a single product.
    The cost of producing and selling a single unit of this product at the
    company’s current activity level of 8,000 units per month is as follows:

    Cost Per Unit
    Direct materials
    . . . . . . . . . . . . . . $2.50
    Direct labor. .
    . . . . . . . . . . . . . . . . $3.00
    Variable
    manufacturing overhead $0.50
    Fixed
    manufacturing overhead. . $4.25
    Variable selling
    & administrative $1.50
    Fixed selling
    & administrative. . . $2.00

    The
    normal selling price is $15 per unit.
    The company’s capacity is 10,000 units per month. An order has been received from an overseas
    source for 2,000 units at t price of $12 per unit. This would would not affect regular sales.

    Required:
    If the order is accepted, by how much will monthly profits be
    increased or decreased? Show your computations.
    (The order would not change the company’s total fixed costs.)

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