Currently, Kelly owns a surfboard manufacturing company and sells each unit for $120 per board with a COGS of $50 per unit of which $10 relates to fixed overhead. Selling costs are $20 per unit $5 of which is fixed. If Kelly accepts the order the company would not have to pay selling costs but they will incur a shipping cost of $6 per unit. Kelly is currently selling 15,000 units. Kelly receives a special order to sell 500 units at $80 per unit. There will be an extra $4 variable cost per unit. If Kelly accepts the special order how much will income be affected? Income will decrease by 5,000 Income will increase by 10,000 Income will increase by 15,000 will increase by 2,500

Currently, Kelly owns a surfboard manufacturing company and sells each unit for $120 per board with a COGS of $50 per unit of which $10 relates to fixed overhead. Selling costs are $20 per unit $5 of which is fixed. If Kelly accepts the order the company would not have to pay selling costs but they will incur a shipping cost of $6 per unit. Kelly is currently selling 15,000 units. Kelly receives a special order to sell 500 units at $80 per unit. There will be an extra $4 variable cost per unit. If Kelly accepts the special order how much will income be affected? Income will decrease by 5,000 Income will increase by 10,000 Income will increase by 15,000 will increase by 2,500

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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