QUESTION 25 The Company provided the following information regarding its only product: Sale price per unit Direct materials used Direct labor incurred Variable manufacturing overhead Variable selling and administrative expenses Fixed manufacturing overhead Fixed selling and administrative expenses Units produced and sold $50.00 $162,000 $189,000 $125,000 $75,000 $65,000 $12,000 25,000 Assume no beginning inventory Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 5000 units at a sale price of $42 per product? (NOTE: Assume regular sales are not affected by the special order. Round any intermediary calculations to the nearest cent.) Increase by $99,800 Increase by $320,200 Increase by $210,000 Decrease by $99,800
QUESTION 25 The Company provided the following information regarding its only product: Sale price per unit Direct materials used Direct labor incurred Variable manufacturing overhead Variable selling and administrative expenses Fixed manufacturing overhead Fixed selling and administrative expenses Units produced and sold $50.00 $162,000 $189,000 $125,000 $75,000 $65,000 $12,000 25,000 Assume no beginning inventory Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 5000 units at a sale price of $42 per product? (NOTE: Assume regular sales are not affected by the special order. Round any intermediary calculations to the nearest cent.) Increase by $99,800 Increase by $320,200 Increase by $210,000 Decrease by $99,800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:QUESTION 25
The Company provided the following information regarding its only product:
Sale price per unit
Direct materials used
Direct labor incurred
Variable manufacturing overhead
Variable selling and administrative expenses
Fixed manufacturing overhead
Fixed selling and administrative expenses
Units produced and sold
$50.00
$162,000
$189,000
$125,000
$75,000
$65,000
$12,000
25,000
Assume no beginning inventory
Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 5000 units at a sale price of $42 per product? (NOTE: Assume regular sales are not
affected by the special order. Round any intermediary calculations to the nearest cent.)
Increase by $99,800
Increase by $320,200
Increase by $210,000
Decrease by $99,800
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