Question
A foreign company has offered to buy 85 units for a reduced sales price of $350 per unit. The marketing manager says the sale will
A foreign company has offered to buy 85 units for a reduced sales price of $350 per unit. The marketing manager says the sale will not affect the company's regular sales. The sales manager says that this sale will require variable selling and administrative costs. The production manager reports that it would require an additional $30,000 of fixed manufacturing costs to accommodate the specifications of the buyer. If Belfry accepts the deal, how will this impact operating income? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)
Belfry Company makes special equipment used in cell towers. Each unit sells for $410. Belfry produces and sells 12,700 units per year. They have provided the following income statement data: $5,207,000 Traditional Format Revenue Cost of goods sold Gross profit Selling & admin, expenses $5,207,000 2.800.000 2,407,000 550,000 Contribution Format Revenue Variable costs: Manufacturing Selling & admin. Contribution margin Fixed costs: Manufacturing Selling & admin. Operating income 900,000 300.000 4,007,000 1,900,000 250.000 $1,857,000 Operating income $1,857,000 A fornica.compaschae poftered to bum R5 usite foroduced sloe pica of 350 sorunit ho marketing O A. Operating income will decrease by S21,719, OB. Operating income will decrease by Sa,282. OC. Operating income will increase by S8,282 OD. Operating income will increase by S29,750Step by Step Solution
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