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Lattimer Company had the following results of operations for the past year: Sales (15,000 units at $12.45) $ 186,750 Variable manufacturing costs $ 104,250 Fixed
Lattimer Company had the following results of operations for the past year:
Sales (15,000 units at $12.45) | $ | 186,750 | |||||
Variable manufacturing costs | $ | 104,250 | |||||
Fixed manufacturing costs | 27,750 | ||||||
Selling and administrative expenses (all fixed) | 42,750 | (174,750 | ) | ||||
Operating income |
A foreign company whose sales will not affect Lattimer's market offers to buy 5,900 units at $8.40 per unit. In addition to existing costs, selling these units would add a $0.34 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:
$4,366loss
$10,266loss
$2,360loss
$6,549profit
$8,555profit
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