Triad Manufacturing incurs $18 of variable costs and $10 of allocated fixed costs to produce a high-quality storage bin that normally sells for $40. A wholesale distributor offers to purchase 2,500 units at $26 each. Triad Manufacturing has excess capacity and can fulfil the order without affecting regular sales. What effect will acceptance of the special order offer have on net income?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Triad Manufacturing incurs $18 of variable costs and $10 of allocated fixed costs
to produce a high-quality storage bin that normally sells for $40. A wholesale
distributor offers to purchase 2,500 units at $26 each. Triad Manufacturing has
excess capacity and can fulfil the order without affecting regular sales.
What effect will acceptance of the special order offer have on net income?
Transcribed Image Text:Triad Manufacturing incurs $18 of variable costs and $10 of allocated fixed costs to produce a high-quality storage bin that normally sells for $40. A wholesale distributor offers to purchase 2,500 units at $26 each. Triad Manufacturing has excess capacity and can fulfil the order without affecting regular sales. What effect will acceptance of the special order offer have on net income?
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