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Bridger Company currently has the capacity to manufacture 250,000 widgets a year. The widgets normally sell for $8.00 each. Bridger Company has the following costs
Bridger Company currently has the capacity to manufacture 250,000 widgets a year. The widgets normally sell for $8.00 each. Bridger Company has the following costs related to manufacturing and selling 200,000 widgets Direct materials Direct labor Variable manufacturing overhead Depreciation on equipment only used for the widgets$40,000 Depreciation on factory Salary of widget production manager Variable selling costs (commissions) Fixed selling costs Total $300,000 $540,000 $180,000 $100,000 $70,000 $60,000 $80,000 $1,370,000 Assume Minot Inc. asks Bridger to complete a manufacture a special order of 10,000 widgets. Minot is willing to pay $5.50 per widget (and the sales commission will apply on this special order) By how much will Bridger's income change if they accept the special order? a. $4,000 increase D. $1,000 increase C $13,500 decrease O c. O d. $1,000 decrease e. $25,000 decrease
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