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The following information relates to a product produced by Faulkland Company: $ 11 Direct materials Direct labor Variable overhead Fixed overhead Unit cost $35 Fixed
The following information relates to a product produced by Faulkland Company: $ 11 Direct materials Direct labor Variable overhead Fixed overhead Unit cost $35 Fixed selling costs are $1,040,000 per year. Variable selling costs of $6 per unit sold are added to cover the transportation cost. Although production capacity is 540,000 units per year, Faulkland expects to produce only 440,000 units next year. The product normally sells for $40 each. A customer has offered to buy 64,000 units for $34 each. The customer will pay the transportation charge on the units purchased. If Faulkland accepts the special order, the effect on income would be a: O $512,000 increase. O $384,000 decrease. O $64,000 increase. O $128,000 increase. Carter Industries has two divisions: the West Division and the East Division. Information relating to the divisions for the year just ended is as follows: $ Units produced and sold Selling price per unit Variable costs per unit Direct fixed cost Common fixed cost West 47,000 $ 7 3 65,000 57,000 East 36,000 14 4 127,000 57,000 Common fixed expenses have been allocated equally to each of the two divisions. Carter's segment margin for the West Division is: O $123,000. O $131,000. O $47,000. O $188,000
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