Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $2.50 per unit. Bluebird currently produces and sells 75,000 units at S6.50
Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $2.50 per unit. Bluebird currently produces and sells 75,000 units at S6.50 each. This level represents 80% of its capacity. These bird feeders would be marketed under the wholesaler's name and would not affect Bluebird's sales through its normal channels. Production costs for these units are $3.65 per unit, which includes $2.00 variable cost and $1.65 fixed cost. If Bluebird accepts this additional business, the effect on net income will be: Multiple Choice $37,500 increase. $7500 increase. $30,000 increase. $17,250 decrease. $30,000 decrease
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started