https//edugen.wileyplus.com S Kimmel, Accounting, ee FINANCIAL ACCOUNTING (ACC20

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https//edugen.wileyplus.com S Kimmel, Accounting, ee FINANCIAL ACCOUNTING (ACC203-204) Gradebook OKION Multiple Choice Question 53 It costs Sheffield Corp $12 of variable ard $5 of Sxed costs to produce ene bathroom scale which ormaly sels for $35 A foreign wholeser offers to puchase 4500 scales at $15each. Carrer weuld inour special shloping cot of si per scale If the onder were acested. SheSeid has suffciont unased capacity to prodace the 4580 scales Ir the special order accepted, what wbefen t ham $13500 decease $a0oo increas $9000 decrense 567500 increase e here to search

Explanation / Answer

Given that company has a capacity to produce 4500 scales

Fixed cost for producing 4500 scales would be 4500*5= 22500

Variable cost for producing 4500 scales would be 4500*12=54000

Total cost of producing 4500 scales is 76500(excluding shipping)

Shipping charges @1$for 4500 scales amount to 4500

Total cost = 81000

But, Revenue earned for 4500 sclaes is 4500*15 = 67500

Hence loss equals 81000-67500=13500

Therfore the Net Income of company would decrease by 13500$.

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