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Benjamin Company had the following results of operations for the past year: $ 161,600 Sales (16,000 units at $10.10) Direct materials and direct labor Overhead
Benjamin Company had the following results of operations for the past year: $ 161,600 Sales (16,000 units at $10.10) Direct materials and direct labor Overhead (20% variable) Selling and administrative expenses (all fixed) Operating income $97,600 17,600 32,200 (147,400) 14,200 $ A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,200 units at $7.72 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $620 and selling and administrative costs by $320. Assuming Benjamin has excess capacity and accepts the offer, its profits will: O Increase by $32,424 Increase by $4,940 Increase by $5.880. O Increase by $6.804. 0 Decease by $6,804
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