It costs Sheridan Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 1700 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Sheridan has sufficient unused capacity to produce the 1700 scales. If the special order is accepted, what will be the effect on net income? $5100 decrease $3400 decrease $3400 increase $25500 increase

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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It costs Sheridan Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 1700 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Sheridan has sufficient unused capacity to produce the 1700 scales. If the special order is accepted, what will be the effect on net income?
$5100 decrease
$3400 decrease
$3400 increase
$25500 increase
 
 
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