Cecil Incorporated provided the following information regarding its only product: Sale price per unit Direct materials used Direct labor incurred Variable manufacturing overhead Variable selling and administrative expenses Fixed manufacturing overhead Fixed selling and administrative expenses Units produced and sold Assume no beginning inventory $50.00 $161,000 $189,000 $124,000 $70,000 $65,000 $12,000 21,000 Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 5,100 units at a sale price of $45 per product? (NOTE: Assume regula OA. Increase by $229,500 OB. Increase by $361,590 OC. Decrease by $97,410 CI

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter5: Process Costing
Section: Chapter Questions
Problem 12EA: What are the total costs to account for if a companys beginning inventory had $231,432 in materials,...
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Cecil Incorporated provided the following information regarding its only product:
Sale price per unit
Direct materials used
Direct labor incurred
Variable manufacturing overhead
Variable selling and administrative expenses
Fixed manufacturing overhead
Fixed selling and administrative expenses
$50.00
$161,000
$189,000
$124,000
$70,000
$65,000
$12,000
21,000
Units produced and sold
Assume no beginning inventory
Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 5,100 units at a sale price of $45 per product? (NOTE: Assume regular sales are
OA. Increase by $229,500
OB. Increase by $361,590
OC. Decrease by $97,410
OD. Increase by $97,410
Transcribed Image Text:K Cecil Incorporated provided the following information regarding its only product: Sale price per unit Direct materials used Direct labor incurred Variable manufacturing overhead Variable selling and administrative expenses Fixed manufacturing overhead Fixed selling and administrative expenses $50.00 $161,000 $189,000 $124,000 $70,000 $65,000 $12,000 21,000 Units produced and sold Assume no beginning inventory Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 5,100 units at a sale price of $45 per product? (NOTE: Assume regular sales are OA. Increase by $229,500 OB. Increase by $361,590 OC. Decrease by $97,410 OD. Increase by $97,410
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