It costs Bonita Industries $11 of variable and $5 of fixed costs to produce one scale which normally sells for $43. A foreign wholesaleroffers to purchase 4100 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted.Bonita has sufficient unused capacity to produce the 4100 scales. If the special order is accepted, what will be the effect on netincome?O $12300 increase$12300 decreaseO $49200 decrease$61500 increase

The fixed cost remains the same in every option. While if there is no production there is always a…

Answered: It costs Bonita Industries $11 of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

A buyer from another country offered to purchase 2,000 units of product for $ 2.50 per unit. The normal selling price is $ 3.00 per unit. The company's regular variable costs of $ 1.50 per unit would not change, however overall fixed costs would increase by $ 500 if his order is accepted. How much will net income increase if this special order is accepted? Multiple Choice $ 2,500. $ 2,000. $1,500. $ 3,000. $ 1,850.
It costs Sohar Company OMR 12 of variable and OMR 5 of fixed costs to produce one unit of production which normally sells for OMR 35. A foreign wholesaler offers to purchase 3,000 units at OMR 15 each. the company would incur special shipping costs of OMR 1 per unit if the order were accepted. Assuming that the company has the excess operating capacity to produce the 3,000 units. If the special order is accepted, what will be the effect on net income? Select one: Oa. None of the answers are correct Ob. OMR 6,000 increase O c. OMR 9,000 decrease O d. OMR 45,000 increase O e. OMR 6,000 decrease
XYZ company currently sells 15,000 units a month for $50 each, has variable costs of $10 per unit, and fixed costs of $300,000. The company is considering increasing the price of its units to $60 per unit. If the price is changed, how many units will the company need to sell for profit to remain the same as before the price change? Select one: O a. None of the given answers. O b. 7,500 O c. 11,250 O d. 9,000 O e. 12,000
what is the answer out of multiple choice above^
Kitts Company buys and sells a product that has a variable cost per unit of $22. Kitts' fixed costs amount to $56,000. The product sells for $26 each. The Company is currently making and selling 20,000 units of product. If Kitts is able to increase sales by 4,000 units, the break-even point will Multiple Choice increase by $16,000. decrease by $16,000. not change. The answer cannot be determined with the information provided.
A company produces a special new type of TV. The company has fixed costs of $476,000, and it costs $1100 to produce each TV. The company projects that if it charges a price of $2600 for the TV, it will be able to sell 800 TVs. If the company wants to sell 850 TVs, however, it must lower the price to $2300. Assume a linear demand What is the maximum profit that can be reached? It is $ (Round answer to nearest cent).
Sarafine, Inc. sells a single product for $25. Variable costs are $12 per unit and fixed costs total $130,000 at a volume level of 5,000 units. Assuming that fixed costs do not change, Sarafine's break-even sales would be: Mutiple Choice $210.000. $250.000. $350.000 $530.000 None of the answers is comect
A product sells for $30 per unit and has variable costs of $18.00 per unit. The fixed costs are $960,000. If the variable costs per unit were to decrease to $16.50 per unit, fixed costs increase to $1,080,000, and the selling price does not change, break-even point in units would: Multiple Choice O O Equal 6,000. Increase by 24,828. Not change. Increase by 4,000. Decrease by 24,828.
At Sandhill Electronics, it costs $31 per unit ($20 variable and $11 fixed) to make an MP3 player that normally sells for $49. A foreign wholesaler offers to buy 3,720 units at $28 each. Sandhill Electronics will incur special shipping costs of $3 per unit. Assuming that Sandhill Electronics has excess operating capacity, indicate the net income (loss) Sandhill Electronics would realize by accepting the special order. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Revenues Costs-Variable manufacturing Shipping Net income $ $ The special order should be accepted Reject Order i i $ $ Accept Order 104,160 (74,400) i (3,720) 26,040 $ $ Net Income Increase (Decrease) 104,160 (74,400) (3,720) 26,040

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