It costs Bonita Industries $28 of variable costs and $13 of allocated fixed costs to produce an industrial trash can that sells for $64. A buyer in Mexico offers to purchase 5000 units at $31 each. Bonita Industries has excess capacity and can handle the additional production. What effect will acceptance of the offer have on net income? Select answer from the options below 1. Increase $155000 2. Increase $50000 3. Decrease $50000 4. Increase $15000

It costs Bonita Industries $28 of variable costs and $13 of allocated fixed costs to produce an industrial trash can that sells for $64. A buyer in Mexico offers to purchase 5000 units at $31 each. Bonita Industries has excess capacity and can handle the additional production. What effect will acceptance of the offer have on net income? Select answer from the options below 1. Increase $155000 2. Increase $50000 3. Decrease $50000 4. Increase $15000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Current Attempt in Progress It costs Oriole Company $28 of variable costs and $14 of allocated fixed costs to produce an industrial trash can that sells for $88. A buyer in Mexico offers to purchase 3500 units at $34 each. Oriole Company has excess capacity and can handle the additional production. What effect will acceptance of the offer have on net income? O Decrease $28000 O Increase $21000 O Increase $119000 O Increase $28000 Save for Later Attempts: 0 of 1 used Submit Answer
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