Cosmic Cosmetics (CC) has capacity to produce and sell 200,000 units per month. Costs at this level are provided in the table below. CC currently sells 175,000 units per month, at $1.55 per unit. Pur Skinn has contacted CC about purchasing 15,000 units at $1.05 each. Current sales would not be affected by the special order, and variable marketing costs would not be incurred on the special order. What is CCs' change in net income if the order is accepted? a. $9,375 increase b. $9,375 decrease c. $5,625 increase d. $5,625 decrease Per Unit Costs: Prime Costs Variable manufacturing overhead Variable marketing Total Costs: Fixed manufacturing overhead Fixed marketing $0.350 0.075 0.250 $20,000 $24,000

Cosmic Cosmetics (CC) has capacity to produce and sell 200,000 units per month. Costs at this level are provided in the table below. CC currently sells 175,000 units per month, at $1.55 per unit. Pur Skinn has contacted CC about purchasing 15,000 units at $1.05 each. Current sales would not be affected by the special order, and variable marketing costs would not be incurred on the special order. What is CCs' change in net income if the order is accepted? a. $9,375 increase b. $9,375 decrease c. $5,625 increase d. $5,625 decrease Per Unit Costs: Prime Costs Variable manufacturing overhead Variable marketing Total Costs: Fixed manufacturing overhead Fixed marketing $0.350 0.075 0.250 $20,000 $24,000

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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