Do It! Review 20-2

Maize Company incurs a cost of $34.97 per unit, of which $19.13 is variable, to make a product that normally sells for $58.20. A foreign wholesaler offers to buy 5,600 units at $30.03 each. Maize will incur additional costs of $1.22 per unit to imprint a logo and to pay for shipping. Compute the increase or decrease in net income Maize will realize by accepting the special order, assuming Maize has sufficient excess operating capacity. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

RejectAcceptNet Income

Increase (Decrease)Revenues$

$

$

Costs$

Net income$

$

$

Should Maize Company accept the special order?

Maize company should RejectAccept

the special order.