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Seekers Company manufactures sonars for fishing boats Model 70 sells for $260 Seekers produces and sells 5,500 of them per year Cost data are
Seekers Company manufactures sonars for fishing boats Model 70 sells for $260 Seekers produces and sells 5,500 of them per year Cost data are as follows KE Variable manufacturing Vanable selling and administrative Fled manufacturing Fand seling and adminstrative $110 per un $18 per un $290,000 per year $150,000 per year A potential deal has come up for a one-time sale of 30 units at a special price of $120 per unt. The marketing manager states that the sale will not negatively impact the company's regular sales activities and will require the normal vanable manufacturing costs and selling and administrative costs. The production manager states that these is plenty of excess capacity and the deal wit not impact fixed costs. The controler points out, however, that because the expected increase in revenues are equal to the expected increase in costs to fit the order, the deal will not have any impact on the bottom line The controlor is correct in his statement True O Fahe
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