Faukland traders has given the following information for a unit of its most popular product: Direct materials 8 Direct labor 3 Overhead (40% variable) 5 Cost to manufacture 16 Desired markup (50%) 8 Target selling price 24 The above cost information is based on 4,200 units. A foreign distributor has offered to buy 1,200 units at a price of 18 per unit. This special order would not disturb regular sales. Variable shipping and other selling expenses would be an additional 1 per unit for the special order. If the special order is accepted, its operating profits will increase by: а. 1,200 b. 1,920 c. 2,400 d. 4,800

Faukland traders has given the following information for a unit of its most popular product: Direct materials 8 Direct labor 3 Overhead (40% variable) 5 Cost to manufacture 16 Desired markup (50%) 8 Target selling price 24 The above cost information is based on 4,200 units. A foreign distributor has offered to buy 1,200 units at a price of 18 per unit. This special order would not disturb regular sales. Variable shipping and other selling expenses would be an additional 1 per unit for the special order. If the special order is accepted, its operating profits will increase by: а. 1,200 b. 1,920 c. 2,400 d. 4,800

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 14E: A company has prepared the following statistics regarding its production and sales at different...

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Reliable traders has given the following information for a unit of its most popular product: Direct materials 8 Direct labor Overhead (40% variable) 5 Cost to manufacture 16 Desired markup (50%) 8 Target selling price 24 The above cost information is based on 4,200 units. A foreign distributor has offered to buy 1,200 units at a price of $18 per unit. This special order would not disturb regular sales. Variable shipping and other selling expenses would be an additional $1 per unit for the special order. If the special order is accepted, Minton's operating profits will increase by: a. $1,200. b. $1,920. c. $2,400. d. $4,800. 3.
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