Dakota Company has been producing and selling 42,000 hats a year. There are no b
ID: 2571526 • Letter: D
Question
Dakota Company has been producing and selling 42,000 hats a year. There are no beginning and ending inventories. The Dakota Corporation has the capacity to produce 52,000 hats. The following data is available:
Selling price per unit $30
Variable manufacturing costs per unit $13
Variable selling and administrative costs per unit $7
Total fixed manufacturing costs $126,000
Total fixed selling and administrative costs $84,000
If a special order is accepted for 10,000 hats at a price of $25 per unit, net income would ________.
A) increase by $20,000
B) increase by $50,000
C) increase by $90,000
D) decrease by $24,000
Explanation / Answer
Incremental revenue 250000 Variable costs: Variable manufacturing costs 130000 Variable selling and administrative costs 70000 Incremental income 50000 Option B is correct
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.