Black Corporation manufactures a product with the following full unit costs at a volume of 4,000 units. Direct materials Direct labor Manufacturing OH (30% variable) $ 200 $ 80 $ 150 Selling expenses (50% variable) $ 50 $ 80 $560 Admin. expenses (10% variable) Total per unit A company recently approached Black Corp with an offer to purchase 450 units for $550 each. Black currently sells for $800 each. Capacity is sufficient to produce the extra 450 units. No selling expenses would be incurred on the special order. If Black Corp accepts the offer, profits will a. Decrease by $120 b. Increase by $66,800 c. Increase by $97,650 d. Decrease by $24,000
Black Corporation manufactures a product with the following full unit costs at a volume of 4,000 units. Direct materials Direct labor Manufacturing OH (30% variable) $ 200 $ 80 $ 150 Selling expenses (50% variable) $ 50 $ 80 $560 Admin. expenses (10% variable) Total per unit A company recently approached Black Corp with an offer to purchase 450 units for $550 each. Black currently sells for $800 each. Capacity is sufficient to produce the extra 450 units. No selling expenses would be incurred on the special order. If Black Corp accepts the offer, profits will a. Decrease by $120 b. Increase by $66,800 c. Increase by $97,650 d. Decrease by $24,000
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 7PB: Remarkable Enterprises requires four units of part A for every unit of Al that it produces....
Related questions
Question
Financial Account

Transcribed Image Text:Black Corporation manufactures a product with the following full unit
costs at a volume of 4,000 units.
Direct materials
Direct labor
Manufacturing OH (30% variable)
$ 200
$ 80
$ 150
Selling expenses (50% variable)
$ 50
$ 80
$560
Admin. expenses (10% variable)
Total per unit
A company recently approached Black Corp with an offer to purchase
450 units for $550 each. Black currently sells for $800 each. Capacity is
sufficient to produce the extra 450 units. No selling expenses would be
incurred on the special order.
If Black Corp accepts the offer, profits will
a. Decrease by $120
b. Increase by $66,800
c. Increase by $97,650
d. Decrease by $24,000
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps

Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College

Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning

Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College

Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning

Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub

Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,

Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning

Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning