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The following Information relates to a product produced by Faulkland Company Direct materials 12 Direct labor Variable overhead 8 Fixed overhead 10 Unit cost $39

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The following Information relates to a product produced by Faulkland Company Direct materials 12 Direct labor Variable overhead 8 Fixed overhead 10 Unit cost $39 Fixed selling costs are $1,050,000 per year. Variable selling costs of $3 per unit sold are added to cover tme transportation cost Although producton capacty s 550000 uns per year, Faulkland expects to produce only 450,000 units next year The product normaly sells for $45 each A customer has offered to buy 65.000 unts for 538 each The customer w pay the transportation charge on the units purchased. If Faulkland accepts the special ordec the effect on income would be a $65,000 Increase. $390,000 increase. $585,000 increase. AUDITING $455,000 decrease

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