Braizen, Inc. produces a product with a $30 per-unit variable cost and an $80 per-unit sales price. Fixed manufacturing overhead costs are $100,000. The firm has a one-time opportunity to sell an additional 1,000 units at $60 each that would not affect its current sales. Assuming the company has sufficient capacity to produce the additional units, how would the acceptance of the special order affect net income? Multiple Choice income would increase by $30,000. income would increase by $140,000. income would crease by $30,000. income would increase by $40,000.
Braizen, Inc. produces a product with a $30 per-unit variable cost and an $80 per-unit sales price. Fixed manufacturing overhead costs are $100,000. The firm has a one-time opportunity to sell an additional 1,000 units at $60 each that would not affect its current sales. Assuming the company has sufficient capacity to produce the additional units, how would the acceptance of the special order affect net income? Multiple Choice income would increase by $30,000. income would increase by $140,000. income would crease by $30,000. income would increase by $40,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Braizen, Inc. produces a product with a $30 per-unit variable cost and an $80 per-unit sales price. Fixed manufacturing overhead costs are $100,000.
The firm has a one-time opportunity to sell an additional 1,000 units at $60 each that would not affect its current sales. Assuming the company has
sufficient capacity to produce the additional units, how would the acceptance of the special order affect net income?
Multiple Choice
income would increase by $30,000.
income would increase by $140,000.
income would decrease by $30,000.
income would increase by $40,000.
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