Currently, Kelly owns a surfboard manufacturing company and sells each unit for $120 per board with a COGS of $50 per unit of which $10 relates to fixed overhead. Selling costs are $20 per unit $5 of which is fixed. If Kelly accepts the order the company would not have to pay selling costs but they will incur a shipping cost of $6 per unit. Kelly is currently selling 15,000 units. Kelly receives a special order to sell 500 units at $80 per unit. There will be an extra $4 variable cost per unit. If Kelly accepts the special order how much will income be affected? Income will decrease by 5,000 Income will increase by 10,000 Income will increase by 15,000 will increase by 2,500

Currently, Kelly owns a surfboard manufacturing company and sells each unit for $120 per board with a COGS of $50 per unit of which $10 relates to fixed overhead. Selling costs are $20 per unit $5 of which is fixed. If Kelly accepts the order the company would not have to pay selling costs but they will incur a shipping cost of $6 per unit. Kelly is currently selling 15,000 units. Kelly receives a special order to sell 500 units at $80 per unit. There will be an extra $4 variable cost per unit. If Kelly accepts the special order how much will income be affected? Income will decrease by 5,000 Income will increase by 10,000 Income will increase by 15,000 will increase by 2,500

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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