Brief Exercise 20-3 LI Your answer is incorrect. Try again. At Bargain Electroni

Question

Brief Exercise 20-3 LI Your answer is incorrect. Try again. At Bargain Electronics, it costs $31 per unit ($20 variable and $11 fixed) to make an MP3 player at full capacity that normally sells for $49. A foreign wholesaler offers to buy 3,720 units at $28 each. Bargain Electronics will incur special shipping costs of $3 per unit. Assuming that Bargain Electronics has excess operating capacity, indicate the net income (loss) Bargain Electronics would realize by accepting the special order. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. Reject Order Accept Order Net Income Increase (Decrease) 28 49 Revenues Costs-Manufacturing Shipping 18 12 Net income t- rejected v The special order should be Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

The special order should be accepted.

Reject order Accept order Net income Increase(Decrease) Revenue(3,720 * $28) $0 $104,160 $104,160 Costs-Manufacturing(3,720 * $20) $0 -$74,400 ($74,400) Shipping(3,720 * $3) $0 -$11,160 ($11,160) Net income $0 $18,600 $18,600

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