Markson Company had the following results of operations for the past year. Contribution margin income statement Sales (11,600 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Income Per Unit $ 20.00 Annual Total $ 232,000 4.25 49,300 6.00 69,600 2.00 23,200 7.75 89,900 4.25 $ 3.50 49,300 $ 40,600 A foreign company offers to buy 3,800 units at $14 per unit. In addition to variable manufacturing and administrative costs, selling these units would increase fixed overhead by $3,040 for the purchase of special tools. Markson's annual productive capacity is 17,400 units. If Markson accepts this additional business, its profits will: Multiple Choice О Increase by $3,610. Decrease by $3,040.
Markson Company had the following results of operations for the past year. Contribution margin income statement Sales (11,600 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Income Per Unit $ 20.00 Annual Total $ 232,000 4.25 49,300 6.00 69,600 2.00 23,200 7.75 89,900 4.25 $ 3.50 49,300 $ 40,600 A foreign company offers to buy 3,800 units at $14 per unit. In addition to variable manufacturing and administrative costs, selling these units would increase fixed overhead by $3,040 for the purchase of special tools. Markson's annual productive capacity is 17,400 units. If Markson accepts this additional business, its profits will: Multiple Choice О Increase by $3,610. Decrease by $3,040.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
am. 125.
Transcribed Image Text:Markson Company had the following results of operations for the past year.
Contribution margin income statement
Sales (11,600 units)
Variable costs
Direct materials
Direct labor
Overhead
Contribution margin
Fixed costs
Fixed overhead
Income
Per Unit
$ 20.00
Annual Total
$ 232,000
4.25
49,300
6.00
69,600
2.00
23,200
7.75
89,900
4.25
$ 3.50
49,300
$ 40,600
A foreign company offers to buy 3,800 units at $14 per unit. In addition to variable manufacturing and administrative costs, selling these units would
increase fixed overhead by $3,040 for the purchase of special tools. Markson's annual productive capacity is 17,400 units. If Markson accepts this
additional business, its profits will:
Multiple Choice
О
Increase by $3,610.
Decrease by $3,040.
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