Benjamin Company had the following results of operations for the past year: Sales (24,800 units at $10.00) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Fixed selling and administrative expenses Income $ 248,000 $ 49,600 99,200 4,960 94,240 19,840 49,600 24,800 A foreign company (whose sales will not affect Benjamin's market) offers to buy 6,200 units at $7.50 per unit. In addition to variable costs, selling these units would increase fixed overhead by $930 and fixed selling and administrative costs by $465. 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 (24,800 units at $10.00) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Fixed selling and administrative expenses Income $ 248,000 $ 49,600 99,200 4,960 94,240 19,840 49,600 24,800 A foreign company (whose sales will not affect Benjamin's market) offers to buy 6,200 units at $7.50 per unit. In addition to variable costs, selling these units would increase fixed overhead by $930 and fixed selling and administrative costs by $465. Assuming Benjamin has excess capacity and accepts the offer, its profits will:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Standard Costing
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 (24,800 units at $10.00)
Variable costs
Direct materials
Direct labor
Overhead
Contribution margin.
Fixed costs
Fixed overhead
Fixed selling and administrative expenses
Income
Multiple Choice
Increase by $46,500
$ 248,000
A foreign company (whose sales will not affect Benjamin's market) offers to buy 6,200 units at $7.50 per unit. In addition to variable costs, selling these units
would increase fixed overhead by $930 and fixed selling and administrative costs by $465. Assuming Benjamin has excess capacity and accepts the offer, its
profits will:
Increase by $9,300
49,600
99,200
4,960
94,240
19,840
49,600
$ 24,800
Transcribed Image Text:A foreign company (whose sales will not affect Benjamin's market) offers to buy 6,200 units at $7.50 per unit. In addition to variable costs, selling these units
would increase fixed overhead by $930 and fixed selling and administrative costs by $465. Assuming Benjamin has excess capacity and accepts the offer, its
profits will:
Multiple Choice
Increase by $46,500.
Increase by $9,300
Decrease by $9,300.
Increase by $8,060.
Increase by $6,665.
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