Chapter 7 Problem Solution 1 Please select the correct answer and solve and explain. "Goodstone Tire Corp sells tires for $90 each.  Per unit costs associated with producing and selling the tires are: Direct Materials $35 Direct Labor $10 Factory Overhead $20 The variable portion of the factory overhead is $8 per unit.  A foreign company wants to purchase 1,000 tires for $65 each.  Assuming Goodstone has excess capacity: 1) The incremental profit from special order will be $12,000 2) The incremental loss from the special order will be $25,000 3) The will be no incremental loss or profit from the special order

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A: The contribution margin is calculated as difference between sales and variable costs.

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A: Formula: Contribution margin per unit = Sales price per unit - Variable cost per unit

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A: Income from the offer acceptance = Units * ( Sale Price - Variable Manufacturing Cost)

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A: Variable costs are costs that vary with the change in level of output.Fixed costs are costs that…

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A: Formula: Profit = Revenues - Expenses.

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A: Differential revenue of producing Product D = Selling price of Product D - Selling price of Product…

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A: Profit = Contribution margin - Fixed costs where, Contribution margin = Sales - Variable costs

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A: The transfer price refers to the price at which the goods are transferred or exchanged within the…

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A: Make or buy is one of an important and crucial decision need to taken by manager, in this decision…

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A: The variable cost of producing each bat = Total Variable Cost/Total Units   Variable Cost = Total…

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A: Formula: Unit contribution margin = Sales price per unit - variable cost per unit

Q: OA. $940,0 OB. $200,0 OC. $250,0 OD. $490,

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A: Net Income of the business means difference of sales revenue and all expenses.

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.