In Harley Company it costs $29 per unit ($19 variable and $10 fixed) to make a p

Q: In Harley Company it costs $29 per unit ($19 variable and $10 fixed) to make a p

Solution: The offer should be accepted. Reject Order Accept Order Net Income - Increase ( Decrease ) Revenues - 91,260 91,260 Cost - Manufacturing - 66,690 66,690 Shipping - 3,510 3,510 Net income / (loss) - 21,060 21,060

ID: 2484036 • Letter: I

Question

In Harley Company it costs $29 per unit ($19 variable and $10 fixed) to make a product that normally sells for $46. A foreign wholesaler offers to buy 3,510 units at $26 each. Harley will incur special shipping costs of $1 per unit. Assuming that Harley has excess operating capacity. Indicate the net income(loss) Harley would realize by accepting the special order. (If an amount reduces the net income for Increase(Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter al other amounts in all other columns as positive and subtract where necessary.

Explanation / Answer

Solution:

The offer should be accepted.

Reject Order Accept Order Net Income - Increase ( Decrease ) Revenues - 91,260 91,260 Cost - Manufacturing - 66,690 66,690 Shipping - 3,510 3,510 Net income / (loss) - 21,060 21,060

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In Harley Company it costs $29 per unit ($19 variable and $10 fixed) to make a p

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In Harley Company it costs $29 per unit ($19 variable and $10 fixed) to make a p

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