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Missoula Industries manufactures a product with the following costs per unit at the expected production of 30,000 units: Direct materials $5 9 Direct labor Variable manufacturing overhead 8 The company has the capacity to produce 60,000 units. The product regularly sells for $40. A wholesaler has offered to pay $30 each for 2,000 units. If the special order is accepted, the effect on Missoula's operating income would be a Multiple Choice $16.000 increase $60,000 increase $20,000 decrease $12,000 decrease

Missoula Industries manufactures a product with the following costs per unit at the expected production of 30,000 units: Direct materials $5 9 Direct labor Variable manufacturing overhead 8 The company has the capacity to produce 60,000 units. The product regularly sells for $40. A wholesaler has offered to pay $30 each for 2,000 units. If the special order is accepted, the effect on Missoula's operating income would be a Multiple Choice $16.000 increase $60,000 increase $20,000 decrease $12,000 decrease

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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Missoula Industries manufactures a product with the following costs per unit at the expected production of 30,000 units: Direct materials Direct labor Variable manufacturing overhead 8 $5 9 The company has the capacity to produce 60,000 units. The product regularly sells for $40. A wholesaler has offered to pay $30 each for 2,000 units. If the special order is accepted, the effect on Missoula's operating income would be a Multiple Choice $16.000 increase $60,000 increase $20,000 decrease $12,000 decrease
Transcribed Image Text:Missoula Industries manufactures a product with the following costs per unit at the expected production of 30,000 units: Direct materials Direct labor Variable manufacturing overhead 8 $5 9 The company has the capacity to produce 60,000 units. The product regularly sells for $40. A wholesaler has offered to pay $30 each for 2,000 units. If the special order is accepted, the effect on Missoula's operating income would be a Multiple Choice $16.000 increase $60,000 increase $20,000 decrease $12,000 decrease
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