Question
The following information relates to the Jax Company for the upcoming year. Amount Per Unit Sales 8,700,000 34.00 Cost of good sold 6,750,000 23.00 Gross
The following information relates to the Jax Company for the upcoming year.
Amount | Per Unit | |
Sales | 8,700,000 | 34.00 |
Cost of good sold | 6,750,000 | 23.00 |
Gross margin | 1,950,000 | 11.00 |
Operating expenses | 740,000 | 2.90 |
Operating profit | 1,210,000 | 8.10 |
The cost of goods sold includes $2,750,000 of fixed manufacturing overhead; the operating expenses includes $340,000 of fixed marketing expenses. A special order offering to buy 51,400 units for $29.00 per uti has been made to Jax. Fortunately, there would be no additional operating expenses assocaited with the order; however, Jax is operating at full capacity. How much will operating profits increase if Jax accepts the special order? a. 832,680 b. Operating profits will not increase as a result of accepting the special offer c. 606,756 d. 225,924 e. 416,340
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