Glade Company produces a single product. The costs of producing and selling a single unit of this product at the company�s current activity level of 8,000 units per month are:
Direct materials $ 2.50
Direct labor $ 3.00
Variable manufacturing overhead $ 0.50
Fixed manufacturing overhead $ 4.25
Variable selling and administrative expenses $ 1.50
Fixed selling and administrative expenses $ 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 a potential customer overseas for 2,000 units at a price of $12.00 per unit. This order would not affect regular sales.
