It costs Ghala Company OMR 13 of variable and OMR 6 of fixed costs to produce one unit which normally sells for OMR 35. Al Hadid Co. offers to purchase 3,000 units at OMR 15 each. Ghala Co. would incur shipping costs of OMR 1 per unit if the order were accepted. Ghala Co. has sufficient unused capacity to produce the 3,000 units. If the special order is accepted, what will be the effect on net income? Select one: a. OMR 6,000 increase Ob. OMR 3,000 increase O c. OMR 9,000 decrease O d. None of the answers are correct O e. OMR 45,000 increase

It costs Ghala Company OMR 13 of variable and OMR 6 of fixed costs to produce one unit which normally sells for OMR 35. Al Hadid Co. offers to purchase 3,000 units at OMR 15 each. Ghala Co. would incur shipping costs of OMR 1 per unit if the order were accepted. Ghala Co. has sufficient unused capacity to produce the 3,000 units. If the special order is accepted, what will be the effect on net income? Select one: a. OMR 6,000 increase Ob. OMR 3,000 increase O c. OMR 9,000 decrease O d. None of the answers are correct O e. OMR 45,000 increase

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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It costs Sohar Company OMR 12 of variable and OMR 5 of fixed costs to produce one unit of production which normally sells for OMR 35. A foreign wholesaler offers to purchase 3,000 units at OMR 15 each. the company would incur special shipping costs of OMR 1 per unit if the order were accepted. Assuming that the company has the excess operating capacity to produce the 3,000 units. If the special order is accepted, what will be the effect on net income? Select one: Oa. None of the answers are correct Ob. OMR 6,000 increase O c. OMR 9,000 decrease O d. OMR 45,000 increase O e. OMR 6,000 decrease
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