Bell Supply House produces recycled paper that it sells by the case. Budgeted amounts for the coming year are as follows: Revenues (20,000 cases at $240,000 $12 each) Direct material $40,000 Direct labor 70,000 Variable manufacturing 50,000 overhead Fixed manufacturing overhead 30,000 190,000 Net income $ 50,000 LTS Enterprises has offered to purchase 2,000 cases of the paper from Bell at a price of $12.50 per case. This special order will have additional variable costs of $0.35 per case due to delivery costs. Bell Supply House has the capacity to produce this order and it will not affect any of its other operations. How much is the incremental profit (loss) associated with the special order? $8,300 $9,000 ($21,000) ○ ($11,700)
Bell Supply House produces recycled paper that it sells by the case. Budgeted amounts for the coming year are as follows: Revenues (20,000 cases at $240,000 $12 each) Direct material $40,000 Direct labor 70,000 Variable manufacturing 50,000 overhead Fixed manufacturing overhead 30,000 190,000 Net income $ 50,000 LTS Enterprises has offered to purchase 2,000 cases of the paper from Bell at a price of $12.50 per case. This special order will have additional variable costs of $0.35 per case due to delivery costs. Bell Supply House has the capacity to produce this order and it will not affect any of its other operations. How much is the incremental profit (loss) associated with the special order? $8,300 $9,000 ($21,000) ○ ($11,700)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Urmila ben
Transcribed Image Text:Bell Supply House produces recycled paper that it sells by the case. Budgeted amounts for
the coming year are as follows:
Revenues (20,000 cases at
$240,000
$12 each)
Direct material
$40,000
Direct labor
70,000
Variable manufacturing
50,000
overhead
Fixed manufacturing overhead
30,000
190,000
Net income
$ 50,000
LTS Enterprises has offered to purchase 2,000 cases of the paper from Bell at a
price of $12.50 per case. This special order will have additional variable costs of $0.35 per
case due to delivery costs. Bell Supply House has the capacity to produce this order and it
will not affect any of its other operations. How much is the incremental profit (loss)
associated with the special order?
$8,300
$9,000
($21,000)
○
($11,700)
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