Question
Oriole Company incurs a cost of $34 per unit, of which $19 is variable, to make a product that normally sells for $59. A foreign
Oriole Company incurs a cost of $34 per unit, of which $19 is variable, to make a product that normally sells for $59. A foreign wholesaler offers to buy 5,200 units at $31 each. Oriole will incur additional costs of $1 per unit to imprint a logo and to pay for shipping. Compute the increase or decrease in net income Oriole will realize by accepting the special order, assuming Oriole has sufficient excess operating capacity. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Reject | Accept | Net Income Increase (Decrease) | |||||
---|---|---|---|---|---|---|---|
Revenues | $enter a dollar amount | $enter a dollar amount | $enter a dollar amount | ||||
Costs | enter a dollar amount | enter a dollar amount | enter a dollar amount | ||||
Net income | $enter a total amount | $enter a total amount | $enter a total amount |
Should Oriole Company accept the special order?
Oriole Company should (REJECT OR ACCEPT) the special order. |
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