Benjamin Company had the following results of operations for the past year: Sales (16,000 units at...
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Benjamin Company had the following results of operations for the past year: Sales (16,000 units at $10) $160,000 Direct materials and direct labor $84,000 Overhead (20% variable) 24,000 Selling and administrative expenses (all fixed) 32,000 (140,000) Operating income $20,000 A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,000 units at $8.00 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $800 and selling and administrative costs by $500. Assuming Benjamin has excess capacity and accepts the offer, its total profits will be DON'T USE COMMA SEPARATORS Benjamin Company had the following results of operations for the past year: Sales (16,000 units at $10) $160,000 Direct materials and direct labor $84,000 Overhead (20% variable) 24,000 Selling and administrative expenses (all fixed) 32,000 (140,000) Operating income $20,000 A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,000 units at $8.00 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $800 and selling and administrative costs by $500. Assuming Benjamin has excess capacity and accepts the offer, its total profits will be DON'T USE COMMA SEPARATORS
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Variable cost per unit We can assume direct materials and direct labor are variable since they are l... View the full answer
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
Posted Date:
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