Kingbird Co. sells product P-14 at a price of $48 a unit. The per-unit cost data are direct materials $15, direct labour $10, and overhead $16 (75% variable). Kingbird has no excess capacity to accept a special order for 37.100 units, at a discount of 25% from the regular price. Selling costs associated with this order would be $3 per unit. Indicate the net income (loss) that Kingbird would realize by accepting the special order. (Enter loss with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Incremental income (loss) $ Kingbird Co. should not accept the special order. 4
Kingbird Co. sells product P-14 at a price of $48 a unit. The per-unit cost data are direct materials $15, direct labour $10, and overhead $16 (75% variable). Kingbird has no excess capacity to accept a special order for 37.100 units, at a discount of 25% from the regular price. Selling costs associated with this order would be $3 per unit. Indicate the net income (loss) that Kingbird would realize by accepting the special order. (Enter loss with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Incremental income (loss) $ Kingbird Co. should not accept the special order. 4
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Kingbird Co. sells product P-14 at a price of $48 a unit. The per-unit cost data are direct materials $15, direct labour $10, and
overhead $16 (75% variable). Kingbird has no excess capacity to accept a special order for 37,100 units, at a discount of 25% from the
regular price. Selling costs associated with this order would be $3 per unit. Indicate the net income (loss) that Kingbird would realize
by accepting the special order. (Enter loss with a negative sign preceding the number, e.g.-15,000 or parenthesis, e.g. (15,000).)
Incremental income (loss) $
Kingbird Co. should not accept
the special order.
4
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