At ABC Company, it costs $30 per unit ($20 variable and $10 fixed) to make a product at full capacity that normally sells for $45 per Units. A foreign wholesaler offers to buy 3,000 units at $25 each. ABC will incur special shipping costs of $2 per unit. Assuming that the company has excess operating capacity, Indicate the net income (loss) for the company would realize by accepting the special order. Reject Ассеpt Net Income Increase/ Decrease Revenues Costs Net Income

At ABC Company, it costs $30 per unit ($20 variable and $10 fixed) to make a product at full capacity that normally sells for $45 per Units. A foreign wholesaler offers to buy 3,000 units at $25 each. ABC will incur special shipping costs of $2 per unit. Assuming that the company has excess operating capacity, Indicate the net income (loss) for the company would realize by accepting the special order. Reject Ассеpt Net Income Increase/ Decrease Revenues Costs Net Income

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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Question

At ABC Company, it costs $30 per unit ($20 variable and $10 fixed) to make a product at full
capacity that normally sells for $45 per Units. A foreign wholesaler offers to buy 3,000 units at
$25 each. ABC will incur special shipping costs of $2 per unit. Assuming that the company has
excess operating capacity,
Indicate the net income (loss) for the company would realize by accepting the special order.
Reject
Ассept
Net Income Increase/ Decrease
Revenues
Costs
Net Income
ords
E English (United States)

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A buyer from another country offered to purchase 2,000 units of product for $ 2.50 per unit. The normal selling price is $ 3.00 per unit. The company's regular variable costs of $ 1.50 per unit would not change, however overall fixed costs would increase by $ 500 if his order is accepted. How much will net income increase if this special order is accepted? Multiple Choice $ 2,500. $ 2,000. $1,500. $ 3,000. $ 1,850.
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