Answer:
Financial advantage 50,220
Explanation:
special order sales price 32
Unit Variable Cost
Direct materials 6.3
Direct Labor 4.0
Variable Overhead 3.4
Total Variable 13.4
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
Contribution per unit 32 - 13.4 = 18.6
2,700 x $18.6 = 50,220
Special Order Cost 0
Increase in fixed cost 0
Income 50,220
If the order had special cost like shipping, commision or taxes it should be considered.
If the order goes beyond the normal capacity and generates additional fixed cost it should be considered.