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Markson Company had the following results of operations for the past year Contribution margin income statement Sales (9,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Per Unit Annual Total $ 20.00 $ 180,000 4.25 38,250 6.00 54,000 2.00 18,000 7.75 69,750 38,250 $31,500 Multiple Choice Fixed overhead Income 4.25 $ 3.50 A foreign company offers to buy 2.500 units at $14 per unit. In addition to variable manufacturing and administrative costs, selling these units would increase fixed overhead by $2.000 for the purchase of special tools. Markson's annual productive capacity is 13.500 units. If Markson accepts this additional business, its profits will O Decrease by $2.000 Decrease by $6.375 Increase by $2.375 Increase by $4.375.

Markson Company had the following results of operations for the past year Contribution margin income statement Sales (9,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Per Unit Annual Total $ 20.00 $ 180,000 4.25 38,250 6.00 54,000 2.00 18,000 7.75 69,750 38,250 $31,500 Multiple Choice Fixed overhead Income 4.25 $ 3.50 A foreign company offers to buy 2.500 units at $14 per unit. In addition to variable manufacturing and administrative costs, selling these units would increase fixed overhead by $2.000 for the purchase of special tools. Markson's annual productive capacity is 13.500 units. If Markson accepts this additional business, its profits will O Decrease by $2.000 Decrease by $6.375 Increase by $2.375 Increase by $4.375.

FINANCIAL ACCOUNTING
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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Markson Company had the following results of operations for the past year. Contribution margin income statement Sales (9,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Income Per Unit Annual Total $ 20.00 $ 180,000 4.25 38,250 6.00 54,000 2.00 18,000 7.75 69,750 4.25 38,250 $ 3.50 $ 31,500 A foreign company offers to buy 2.500 units at $14 per unit. In addition to variable manufacturing and administrative costs, selling these units would increase fixed overhead by $2,000 for the purchase of special tools. Markson's annual productive capacity is 13.500 units. If Markson accepts this additional business, its profits will: Multiple Choice OO Decrease by $2,000 Decrease by $6.375 Increase by $2.375 Increase by $4.375. Decrease by $7.400.
Transcribed Image Text:Markson Company had the following results of operations for the past year. Contribution margin income statement Sales (9,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Income Per Unit Annual Total $ 20.00 $ 180,000 4.25 38,250 6.00 54,000 2.00 18,000 7.75 69,750 4.25 38,250 $ 3.50 $ 31,500 A foreign company offers to buy 2.500 units at $14 per unit. In addition to variable manufacturing and administrative costs, selling these units would increase fixed overhead by $2,000 for the purchase of special tools. Markson's annual productive capacity is 13.500 units. If Markson accepts this additional business, its profits will: Multiple Choice OO Decrease by $2,000 Decrease by $6.375 Increase by $2.375 Increase by $4.375. Decrease by $7.400.
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