Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Luse Enterprises is considering a special order for an export company. Luses normal selling price is $15 per unit, and the price for the special

Luse Enterprises is considering a special order for an export company. Luses normal selling price is $15 per unit, and the price for the special order is $10 per unit for 10,000 units. Luses variable cost is normally $8 per unit but $1 per unit in selling expense that is normally incurred will be avoided on the special order. Luse has capacity to produce 100,000 units and is currently selling 90,000. Total fixed costs of $30,000 per year will be unaffected. What will be the impact of the accepting the special order on Luses income?

income will increase by $30,000
income will increase by $70,000
income will increase by $23,000
income will increase by $15,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions