Benjamin Company had the following results of operations for the past year: Sales (17,600 units at $10.00) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Fixed selling and administrative expenses Income $ 176,000 35,200 70,400 3,520 66,880 14,080 35,200 $ 17,600 A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,400 units at $7.50 per unit. In addition to variable costs, selling these units would increase fixed overhead by $660 and fixed selling and administrative costs by $330. Assuming Benjamin has excess capacity and accepts the offer, its profits will:
Benjamin Company had the following results of operations for the past year: Sales (17,600 units at $10.00) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Fixed selling and administrative expenses Income $ 176,000 35,200 70,400 3,520 66,880 14,080 35,200 $ 17,600 A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,400 units at $7.50 per unit. In addition to variable costs, selling these units would increase fixed overhead by $660 and fixed selling and administrative costs by $330. Assuming Benjamin has excess capacity and accepts the offer, its profits will:
Chapter1: Financial Statements And Business Decisions
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Benjamin Company had the following results of operations for the past year.
Sales (17,600 units at $10.00)
Variable costs
Direct materials
Direct labor
Overhead
Contribution margin
Fixed costs
Fixed overhead
Fixed selling and administrative expenses
Income
$ 176,000
35,200
70,400
3,520
66,880
14,080
35,200
$ 17,600
A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,400 units at $7.50 per unit. In addition to
variable costs, selling these units would increase fixed overhead by $660 and fixed selling and administrative costs by $330
Assuming Benjamin has excess capacity and accepts the offer, its profits will:
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