Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

O Contribution margin is calculated by subtracting: Total variable costs from total revenues Cost of goods sold from total revenues Fixed costs from total

image text in transcribed

O Contribution margin is calculated by subtracting: Total variable costs from total revenues Cost of goods sold from total revenues Fixed costs from total revenues Total manufacturing costs from total revenues Question 12 (4 points) Listen Black Horse Corporation manufactures a product with the following full unit costs at a volume of 2,000 units: Direct materials Direct labor Manufacturing overhead (30% variable) Selling expenses (50% variable) Administrative expenses (10% variable) Total per unit $100 40 75 25 40 $280 A company recently approached Black Horse's management with an offer to purchase 225 units for $275 each. Black Horse currently sells the product to dealers for $400 each. Black Horse's capacity is sufficient to produce the extra 225 units. No selling expenses would be incurred on the special order. If Black Horse's management accepts the offer, profits will: Increase by $24,412.50 Decrease by $60,000 Increase by $33,400 Decrease by $24,412.50

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

Recommended Textbook for

Accounting

Authors: Carl warren, James Reeve, Jonathen Duchac, Sheila Elworthy,

Volume 1, 2nd canadian Edition

176509739, 978-0176509736, 978-0176509743

More Books

Students also viewed these Accounting questions

Question

A brokerage account is subject to rules

Answered: 1 week ago