FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Bartleby Related Questions Icon

Related questions

Question

Sd

Widget Inc. manufactures widgets. The company has the capacity to produce
100,000 widgets per year, but it currently produces and sells 75,000 widgets per
year. The following information relates to current production:
Sales price per unit
Variable costs per unit:
Manufacturing
Marketing and administrative
$45
$25
$6
Total fixed costs:
Manufacturing
Marketing and administrative
If a special sales order is accepted for 6900 widgets at a price of $37 per unit,
and fixed costs remain unchanged, how would operating income be affected?
(NOTE: Assume regular sales are not affected by the special order.)
Increase by $255,300
Decrease by $41,400
Increase by $1,800,000
Increase by $41,400
$76,000
$24,000
expand button
Transcribed Image Text:Widget Inc. manufactures widgets. The company has the capacity to produce 100,000 widgets per year, but it currently produces and sells 75,000 widgets per year. The following information relates to current production: Sales price per unit Variable costs per unit: Manufacturing Marketing and administrative $45 $25 $6 Total fixed costs: Manufacturing Marketing and administrative If a special sales order is accepted for 6900 widgets at a price of $37 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) Increase by $255,300 Decrease by $41,400 Increase by $1,800,000 Increase by $41,400 $76,000 $24,000
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education