Grill Time Sells Its Barbecue Sets for $170 Each Grill Time Has Enough Idle Capacity to Accept a One-Time-Only

question 181

Essay

Grill Time sells its barbecue sets for $170 each.Suppose the company incurs the following average cost per barbecue set:
$\begin{array}{lr}\text { Direct materials } & \$ 52 \\\text { Direct labor } & 28 \\\text { Variable manufacturing overhead } & 11 \\\text { Variable selling expenses } & 5 \\\text { Fixed manufacturing overhead } & \underline{24} \\\text { Total cost } & \$ 120 \\\text { * } \$ 1,800,000 / 75,000 \text { units }\end{array}$
Grill Time has enough idle capacity to accept a one-time-only special order from Backyard Living,Inc.for 2,000 barbecue sets at a sales price of $130 per set.Grill Time will not incur $2 of variable selling expenses for this order.
How would accepting the order affect Grill Time's operating income?

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Definitions:

Cross-Border Trade

The exchange of goods or services between individuals, companies, or governments from different countries.

Mexican Business Environment

The economic, cultural, and regulatory context within which businesses operate in Mexico.

Common Currency

A system where a single form of money is used across multiple countries, facilitating easier trade and financial transactions.

Farm Exports

Agricultural products produced on farms that are sold and shipped to other countries as part of international trade.