Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $2.40 per unit. Bluebird currently produces and sells 75,000 units at $6.40 each. This level represents 80% of its capacity. These bird feeders would be marketed under the wholesaler's name and would not affect Bluebird's sales through its normal channels. Production costs for these units are $3.60 per unit, which includes $1.95 variable cost and $1.65 fixed cost. If Bluebird accepts this additional business, the effect on net income will be: Multiple Choice $29,250 decrease. $18,000 decrease. $36,000 increase. $29,250 increase. $6,750 increase.
Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $2.40 per unit. Bluebird currently produces and sells 75,000 units at $6.40 each. This level represents 80% of its capacity. These bird feeders would be marketed under the wholesaler's name and would not affect Bluebird's sales through its normal channels. Production costs for these units are $3.60 per unit, which includes $1.95 variable cost and $1.65 fixed cost. If Bluebird accepts this additional business, the effect on net income will be: Multiple Choice $29,250 decrease. $18,000 decrease. $36,000 increase. $29,250 increase. $6,750 increase.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $2.40 per unit. Bluebird currently produces and sells 75,000 units at $6.40
each. This level represents 80% of its capacity. These bird feeders would be marketed under the wholesaler's name and would not affect Bluebird's sales
through its normal channels. Production costs for these units are $3.60 per unit, which includes $1.95 variable cost and $1.65 fixed cost. If Bluebird
accepts this additional business, the effect on net income will be:
Multiple Choice
$29,250 decrease.
$18,000 decrease.
$36,000 increase.
$29,250 increase.
$6,750 increase.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F17e8d1d7-0817-4afa-b1d8-2cbedcad66ee%2F8c3b8161-0565-4716-9524-8f260fb8b98d%2Ftu3dfon_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $2.40 per unit. Bluebird currently produces and sells 75,000 units at $6.40
each. This level represents 80% of its capacity. These bird feeders would be marketed under the wholesaler's name and would not affect Bluebird's sales
through its normal channels. Production costs for these units are $3.60 per unit, which includes $1.95 variable cost and $1.65 fixed cost. If Bluebird
accepts this additional business, the effect on net income will be:
Multiple Choice
$29,250 decrease.
$18,000 decrease.
$36,000 increase.
$29,250 increase.
$6,750 increase.
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