Answer:
The contribution to profit from the special order is $1,381,600 and yes the special order should be accepted
Explanation:
In this question, we have to determine the total cost between two situations which are shown below:
On Special order:
Total cost = Number of computers sold × price per computer
= 3,140 computers × $1,240
= $3,893,600
On normal level
Total cost = Number of computers sold × total units cost
= 3,140 computers × $800
= $2,512,000
The total unit cost includes $540 for direct materials, $160 for direct labor, and $100 for indirect unit-level manufacturing costs. If we add these three unit cost than it come $800
By comparing these above situations, the difference would be $1,381,600 which reflect the contribution to profit from the special order
And, the benefit of $1,381,600 is from the special order, so the special order should be accepted.