Question
Lattimer Company had the following results of operations for the past year: Sales (15,000 units at $11.75) $ 176,250 Variable manufacturing costs $ 93,750 Fixed
Lattimer Company had the following results of operations for the past year: Sales (15,000 units at $11.75) $ 176,250 Variable manufacturing costs $ 93,750 Fixed manufacturing costs 17,250 Selling and administrative expenses (all fixed) 32,250 (143,250 ) Operating income $ 33,000 A foreign company whose sales will not affect Lattimer's market offers to buy 4,500 units at $7.00 per unit. In addition to existing costs, selling these units would add a $0.20 selling cost for export fees. Lattimers annual production capacity is 25,000 units. If Lattimer accepts this additional business, the special order will yield a: Multiple Choice $2,700 loss. $7,200 loss. $3,375 profit. $1,800 loss. $2,475 profit
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