Buchanan Company currently sells 4,000 units of product Q for $1 each. Capacity is 5,000 units. Variable costs are $0.40 and avoidable fixed costs are $400. A chain store has offered $0.80 per unit for 2,000 units of Q. If Buchanan accepts the order, the change in income will be a $200 increase. $240 increase. $60 decrease. $160 increase. $80 decrease. $480 increase.
Buchanan Company currently sells 4,000 units of product Q for $1 each. Capacity is 5,000 units. Variable costs are $0.40 and avoidable fixed costs are $400. A chain store has offered $0.80 per unit for 2,000 units of Q. If Buchanan accepts the order, the change in income will be a $200 increase. $240 increase. $60 decrease. $160 increase. $80 decrease. $480 increase.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Buchanan Company currently sells 4,000 units of product Q for $1 each. Capacity is 5,000 units. Variable costs are $0.40 and avoidable fixed costs are $400. A chain store has offered $0.80 per unit for 2,000 units of Q. If Buchanan accepts the order, the change in income will be a
$200 increase.
$240 increase.
$60 decrease.
$160 increase.
$80 decrease.
$480 increase.
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