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Delicious Foods manufactures various types of ice cream that feature pistachios. Foodie Company has approached Delicious Foods with a proposal to sell the company its
Delicious Foods manufactures various types of ice cream that feature pistachios. Foodie Company has approached Delicious Foods with a proposal to sell the company its top selling ice cream at a price of $22,000 for 10,000 pounds. The costs shown are associated with production of 10,000 pounds of ice cream:
Cost Information Cost Type Costs Direct Materials $13,000 Direct Labor $5,000 Variable Overhead $5,000 Fixed Overhead $2,000
No fixed overhead costs are avoidable. If Delicious Foods accepts the offer, by how much will net income increase (decrease)?
Group of answer choices $(3,000) ($7,000)
Delicious Foods manufactures various types of ice cream that feature pistachios. Foodie Company has approached Delicious Foods with a proposal to sell the company its top selling ice cream at a price of $22,000 for 10,000 pounds. The costs shown are associated with production of 10,000 pounds of ice cream:
Cost Type | Costs |
---|---|
Direct Materials | $13,000 |
Direct Labor | $5,000 |
Variable Overhead | $5,000 |
Fixed Overhead | $2,000 |
No fixed overhead costs are avoidable. If Delicious Foods accepts the offer, by how much will net income increase (decrease)?
Group of answer choices
$(3,000)
($7,000)
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