A business received an offer from an exporter for 10,000 units of product at $17.50 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data is available: Domestic unit sales price$20Unit manufacturing costs: Variable11 Fixed1 What is the amount of gain or loss from acceptance of the offer?a $65,000 gainb $50,000 lossc $30,000 lossd $20,000 loss

Formula: Total revenue = Total sales units x sales price. Multiplying sales units with sales price…

Answered: A business received an offer from an…

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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A business received an offer from an exporter for 10,000 units of product at $17.50 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data is available:

Domestic unit sales price
$20

Unit manufacturing costs:

Variable
11

Fixed
1

What is the amount of gain or loss from acceptance of the offer?

a
$65,000 gain

b
$50,000 loss

c
$30,000 loss

d
$20,000 loss

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