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Consider the following information: Variable cost of producing 70,000 units $4 per unit $280,000 Fixed costs of production 70,000 units Current revenues from selling 70,000
Consider the following information: Variable cost of producing 70,000 units $4 per unit $280,000 Fixed costs of production 70,000 units Current revenues from selling 70,000 units $300,000 $700,000 The company has no excess capacity. Which of the following is true if the company accepts a special order of $8 sales revenue per unit for 10,000 units? a. The company should accept the special offer b. The company will be $20,000 worse off by accepting the special order c. Fixed costs will increase d. The company will have an $80,000 increase in revenue
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