?

AP® Chemistry

Free Version

Upgrade subject to access all content

Moderate

Sidney Partners: Change in Profits Special Order

MGRACT-@SNQLS

Sidney Partners (SP) received an order for 1,000 motors from an international customer outside their normal customer base area. They have idle capacity enough to make these motors without disturbing existing markets. Last year, SP cost to make these motors was:

Unit cost:
Direct Materials \$500
Direct Labor \$200
Variable Manufacturing Overhead \$250
Fixed Manufacturing Overhead \$350
Total cost per unit \$1,300

SP's normal pricing is \$1,800 but the customer has only agreed to pay \$1,600 per unit. What is the impact on SP's profits if they accept and make this order?

Enter as a positive (increase to profits) or a negative amount (decrease to profits). Enter as a whole number, without dollars signs or commas.