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Markson Company had the following results of operations for the past year. Contribution margin income statement Sales (8,000 units) Variable costs Direct materials Direct labor
Markson Company had the following results of operations for the past year. Contribution margin income statement Sales (8,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Income Per Unit $ 20.00 Annual Total $ 160,000 4.25 34,000 6.00 48,000 2.00 16,000 7.75 62,000 4.25 34,000 $ 3.50 $ 28,000 A foreign company offers to buy 2,000 units at $14 per unit. In addition to variable manufacturing and administrative costs, selling these units would increase fixed overhead by $1,600 for the purchase of special tools. Markson's annual productive capacity is 12,000 units. If Markson accepts this additional business, its profits will: Multiple Choice Increase by $3,500. Decrease by $5,650. Decrease by $1,600. Increase by $1,900. Decrease by $5,100
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