Question
8. Blossom Company incurs a cost of $35 per unit, of which $19 is variable, to make a product that normally sells for $58. A
8. Blossom Company incurs a cost of $35 per unit, of which $19 is variable, to make a product that normally sells for $58. A foreign wholesaler offers to buy 6,500 units at $31 each. Blossom will incur additional costs of $2 per unit to imprint a logo and to pay for shipping. (a) Calculate the increase or decrease in net income Blossom will realize by accepting the special order, assuming Blossom has sufficient excess operating capacity. (If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).)
Calculate the increase or decrease in net income Blossom will realize by accepting the special order, assuming Blossom has sufficient excess operating capacity. (If an amount reduces the net income then enter with a negative sign preceding the number, eg. - 15,000 or parenthesis, eg. (15,000).) Net Income Increase (Decrease) Incremental revenue Incremental cost $ Increase (decrease) in net incomeStep by Step Solution
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