Blue Spruce Co. sells product P-14 at a price of $52 a unit. The per-unit cost data are direct materials $16, direct labour $10, and overhead $16 (75% variable). Blue Spruce has no excess capacity to accept a special order for 37,300 units, at a discount of 25% from the regular price. Selling costs associated with this order would be $4 per unit. Indicate the net income (loss) that Blue Spruce would realize by accepting the special order. (Enter loss with a negative sign preceding the number, e.g.-15,000 or parenthesis, e.g. (15,000).)
Blue Spruce Co. sells product P-14 at a price of $52 a unit. The per-unit cost data are direct materials $16, direct labour $10, and overhead $16 (75% variable). Blue Spruce has no excess capacity to accept a special order for 37,300 units, at a discount of 25% from the regular price. Selling costs associated with this order would be $4 per unit. Indicate the net income (loss) that Blue Spruce would realize by accepting the special order. (Enter loss with a negative sign preceding the number, e.g.-15,000 or parenthesis, e.g. (15,000).)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Your answer is partially correct.
Blue Spruce Co. sells product P-14 at a price of $52 a unit. The per-unit cost data are direct materials $16, direct labour $10, and
overhead $16 (75% variable). Blue Spruce has no excess capacity to accept a special order for 37,300 units, at a discount of 25% from
the regular price. Selling costs associated with this order would be $4 per unit. Indicate the net income (loss) that Blue Spruce would
realize by accepting the special order. (Enter loss with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).)
Incremental income (loss)
$
(111900)
Blue Spruce Co. should not accept the special order.
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