Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Question
Winter Grow Inc. manufactures a range of heat mats. The production information for its standard heat mat is follows:
Production Information for Standard Heat MatProduction Information | Amount |
---|---|
Monthly production capacity | 25,000 units |
Current level of production | 18,000 units |
Normal selling price per unit | $23 per unit |
Variable |
$5 per unit |
Variable selling and administrative expenses | $2 per unit |
Fixed manufacturing costs (allocated) | $4 per unit |
Fixed selling and administrative expenses (allocated) | $2 per unit |
During current month, the company received an offer to sell 5,000 lights to an exporter for $13 per unit. The variable selling and administrative expenses per unit will be reduced by $1 as this is a one-off offer and some of the selling expenses would not be payable on this offer. Acceptance of this order does not affect the pricing policy in the domestic market.
How much would be the profit or loss from the acceptance of this offer?
Group of answer choices
$35,000 profit
$35,000 loss
$75,000 profit
$40,000 loss
SAVE
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