Question
Markson Company had the following results of operations for the past year: Contribution margin income statement Per Unit Annual Total Sales (11,600 units) $ 20.00
Markson Company had the following results of operations for the past year: Contribution margin income statement Per Unit Annual Total Sales (11,600 units) $ 20.00 $ 232,000 Variable costs Direct materials 4.25 49,300 Direct labor 6.00 69,600 Overhead 2.00 23,200 Contribution margin 7.75 89,900 Fixed costs Fixed overhead 4.25 49,300 Income $ 3.50 $ 40,600 A foreign company offers to buy 3,800 units at $14 per unit. In addition to variable manufacturing and administrative costs, selling these units would increase fixed overhead by $3,040 for the purchase of special tools. Marksons annual productive capacity is 17,400 units. If Markson accepts this additional business, its profits will: Multiple Choice Increase by $6,650. Decrease by $11,950. Decrease by $3,040. Increase by $3,610. Decrease by $9,690.
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