Mitchell Company manufactures a product with a unit variable cost of $50 and a unit sales price of $100. Fixed manufacturing costs were $480,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 1,000 units at $80 each in a foreign market which would not affect its fixed costs and present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows: O Income would decrease by $10,000. Income would decrease by $20,000. Income would increase by $80,000. Income would increase by $30,000
Mitchell Company manufactures a product with a unit variable cost of $50 and a unit sales price of $100. Fixed manufacturing costs were $480,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 1,000 units at $80 each in a foreign market which would not affect its fixed costs and present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows: O Income would decrease by $10,000. Income would decrease by $20,000. Income would increase by $80,000. Income would increase by $30,000
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 6MC: Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling...
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