Fleming Company Had the Following Results of Operations for the Past

question 62

Essay

Fleming Company had the following results of operations for the past year:
$$\begin{array} { l c } \text { Bales } ( 10,000 \text { units at } \$ 6.80 ) & \$ 68,000 \\\text { Materials and direct labor } & ( 20,000 ) \\\text { Overhead (40\% variable) } & ( 10,000 ) \\\text { Selling and administrative expenses (all } & ( 6,000 ) \\\text { fixed) } & \\\text { Operating income } & \$ 32,000 \end{array}$$
A foreign company (whose sales will not affect Fleming's regular sales)offers to buy 2,000 units at $5 per unit.In addition to variable manufacturing costs,there would be shipping costs of $1,200 in total on these units.Should Fleming take this order? Explain.

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Definitions:

Job Cost Sheet

A document that records and tracks the costs associated with a specific job or project, including materials, labor, and overhead.

Receiving Report

A document used by a company to record the receipt of goods from a supplier, detailing the quantity and condition of the items received.

Purchased Materials

Refers to the raw materials bought by a company to be used in production or merchandise bought for resale.

Manufacturing Department

A specific division within a company that is responsible for the production of goods.