Seasons Manufacturing manufactures a product with a unit variable cost of $100 a

Q: Seasons Manufacturing manufactures a product with a unit variable cost of $100 a

Solution: Therefore, the answer to the above question is - Income would increase by $ 40,000 Increase in Sales 140,000 Less: Variable cost 100,000 Less: Fixed Cost Nil Increase in Income $ 40,000

ID: 2454026 • Letter: S

Question

Seasons Manufacturing manufactures a product with a unit variable cost of $100 and a unit sales price of $176. Fixed manufacturing costs were $480,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 1,000 units at $140 each in a foreign market which would not affect its present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows:

Income would increase by $140,000.

Income would increase by $40,000.

Income would decrease by $8,000.

Income would increase by $8,000.

Income would increase by $140,000.

Explanation / Answer

Solution:

Therefore, the answer to the above question is -

Income would increase by $ 40,000

Increase in Sales 140,000 Less: Variable cost 100,000 Less: Fixed Cost Nil Increase in Income $ 40,000

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Seasons Manufacturing manufactures a product with a unit variable cost of $100 a

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