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Benjamin Company had the following results of operations for the past year: Sales (13,000 units at $18) Direct materials and direct labor overhead (20% variable)
Benjamin Company had the following results of operations for the past year: Sales (13,000 units at $18) Direct materials and direct labor overhead (20% variable) Selling and administrative expenses (all fixed) Operating income 234,000 $78,000 13,000 13,000 (104,000) 130,000 A foreign company (whose sales will not affect Benjamin's market) offers to buy 3,250 units at $14.40 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $620 and selling and administrative costs by $580. Assuming Benjamin's productive capacity is 13,000 units per year and accepts the offer, its profits will: Multiple Choice Decrease by$118,300. Decrease by $12,900. Increase by $ 3,830 Increase by $ 10.500 Decrease by $11,700
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