Bell Supply House produces recycled paper that it sells by the case. Budgeted amounts for the coming year are as follows: Revenues (20,000 cases at $240,000 $12 each) Direct material $40,000 Direct labor 70,000 Variable manufacturing 50,000 overhead Fixed manufacturing overhead 30,000 190,000 Net income $ 50,000 LTS Enterprises has offered to purchase 2,000 cases of the paper from Bell at a price of $12.50 per case. This special order will have additional variable costs of $0.35 per case due to delivery costs. Bell Supply House has the capacity to produce this order and it will not affect any of its other operations. How much is the incremental profit (loss) associated with the special order? $8,300 $9,000 ($21,000) ○ ($11,700)
Bell Supply House produces recycled paper that it sells by the case. Budgeted amounts for the coming year are as follows: Revenues (20,000 cases at $240,000 $12 each) Direct material $40,000 Direct labor 70,000 Variable manufacturing 50,000 overhead Fixed manufacturing overhead 30,000 190,000 Net income $ 50,000 LTS Enterprises has offered to purchase 2,000 cases of the paper from Bell at a price of $12.50 per case. This special order will have additional variable costs of $0.35 per case due to delivery costs. Bell Supply House has the capacity to produce this order and it will not affect any of its other operations. How much is the incremental profit (loss) associated with the special order? $8,300 $9,000 ($21,000) ○ ($11,700)
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 9E: Nozama.com Inc. sells consumer electronics over the Internet. For the next period, the budgeted cost...
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