answer in text form please (without image) A company currently sells 8,020 basketballs (units) per year for $25 each. The company can make up to 10,020 basketballs per year.Each basketball made includes $15 in variable costs and $6.50 of fixed costs. A new customer offers to buy 605 basketballs for $20each. For this special offer, the incremental fixed costs are $3.80 per ball. No other costs will change if the offer is accepted.a) For this special offer, calculate the income.b) Should the special offer be accepted or rejected?(a) Special offer analysisContribution marginIncome(b) The company shouldPer Unit0.00Total

The contribution Margin is calculated as difference between sales and variable cost. The net income…

Answered: A company currently sells 8,020…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EB: Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all...

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Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the production of the boxed lunches. The costs to make the cookies are: A potential supplier has offered to sell Country Diner the cookies for $0.85 each. If the cookies are purchased, 10% of the fixed overhead could be avoided. If Jason accepts the offer, what will the effect on profit be?
Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided, If Reuben accepts the offer, what will the effect on profit be?
Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income statement for the year, before any special orders, is as follows: Fixed costs included in the forecasted income statement are $400,000 in manufacturing cost of goods sold and $200,000 in selling expenses. A new client placed a special order with Deuce, offering to buy 1,000 tennis rackets for $100.00 each. The company will incur no additional selling expenses if it accepts the special order. Assuming that Deuce has sufficient capacity to manufacture 1,000 more tennis rackets, by what amount would differential income increase (decrease) as a result of accepting the special order? (Hint: First compute the variable cost per unit relevant to this decision.)
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A company currently sells 8,280 basketballs (units) per year for $25 each. The company can make up to 10,280 basketballs per year. Each basketball made includes $15 In variable costs and $6.50 of fixed costs. A new customer offers to buy 670 basketballs for $20 each. For this special offer, the incremental fixed costs are $3.80 per ball. No other costs will change if the offer is accepted. a) For this special offer, calculate the income. b) Should the special offer be accepted or rejected? (a) Special offer analysis Contribution margin Income (b) The company should $ Per Unit 0.00 Total
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