Angel Company expects to sell 500,000 units in 2021 at P50 per unit. Variable manufacturing costs in producing the product amount to P20 per unit and fixed manufacturing costs amount to P12.50 per unit. A special order from Saints Company of 50,000 units were made at an offered price of P28.75 per unit. Regular sales from customers will not be affected from this transaction. However, in order to meet the specifications and requirements of Saints Company, overtime pay would be incurred amounting to P3.75 per unit. Determine the effect in income when the special order is accepted. Indicate whether increase or decrease 1. 250,000 increase 2. 375,000 decrease 3. 437,500 increase 4. 187,500 decrease

Angel Company expects to sell 500,000 units in 2021 at P50 per unit. Variable manufacturing costs in producing the product amount to P20 per unit and fixed manufacturing costs amount to P12.50 per unit. A special order from Saints Company of 50,000 units were made at an offered price of P28.75 per unit. Regular sales from customers will not be affected from this transaction. However, in order to meet the specifications and requirements of Saints Company, overtime pay would be incurred amounting to P3.75 per unit. Determine the effect in income when the special order is accepted. Indicate whether increase or decrease 1. 250,000 increase 2. 375,000 decrease 3. 437,500 increase 4. 187,500 decrease

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 3PB: Cinnamon Depot bakes and sells cinnamon rolls for $1.75 each. The cost of producing 500,000 rolls in...

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