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: O a. None of the answers are correct O b. OMR 6,000 increase O c. OMR 9,000 decrease O d. OMR 45,000 increase O e. OMR 6,000 decrease

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: O a. None of the answers are correct O b. 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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Description: It costs Sohar Company OMR 12 of variable and OMR 5 of fixed costs to produce one unit of production which normally sells forOMR 35. A foreign wholesaler offers to purchase 3,000 units at OMR 15 each. the company would incur special shipping costs o

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 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 O b. OMR 3,000 increase C. OMR 45,000 increase d. None of the answers are correct e. OMR 9,000 decrease
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Green Co. incurses cost of $15 per pound to produce Product X, which it sells for $26 per pound. The company can further process Product X to produce Product Y. Product Y would sell for $30 per pound and would require an additional cost of $10 per pound to be produced. The differential cost of producing Product Y is _____.
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At Blossom Electronics, it costs $33 per unit ($15 variable and $18 fixed) to make an MP3 player that normally sells for $54. A foreign wholesaler offers to buy 4,520 units at $26 each. Blossom Electronics will incur special shipping costs of $1 per unit. Assuming that Blossom Electronics has excess operating capacity, indicate the net income (loss) Blossom Electronics would realize by accepting the special order. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45).) Revenues Costs-Variable manufacturing Shipping Net income The special order should be Reject Order $ $ Accept Order Net Income Increase (Decrease) $ $ $ $