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String Corporation can manufacture 490,000 tennis rackets a year at a variable cost of $15 per racket and at the fixed costs of $500,000. String
String Corporation can manufacture 490,000 tennis rackets a year at a variable cost of $15 per racket and at the fixed costs of $500,000. String budgeted that it can sell 400,000 at $25 each. An additional order of 100,000 was received, but at a discount of 35% from the regular price.
If String accepts the special order, income before taxes will: |
| ||||
| A) | Decrease by $100,000 | C) | Increase by $25,000 | |
| B) | Increase by $125,000 | D) | not change at all |
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