Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following operating information reports the results of Pronghorn Companys production and sale of 12,500 air-conditioned motorcycle helmets last year. Based on early market forecasts,
The following operating information reports the results of Pronghorn Companys production and sale of 12,500 air-conditioned motorcycle helmets last year. Based on early market forecasts, Pronghorn expects the same results this year.
Sales | $2,251,000 | ||
Variable manufacturing expenses | 814,000 | ||
Fixed manufacturing expenses | 277,000 | ||
Variable selling and administrative expenses | 98,000 | ||
Fixed selling and administrative expenses | 224,000 |
The American Motorcycle Club has offered to purchase 1,800 helmets at a price of $100 each. Pronghorn has sufficient idle capacity to fill the order, which would not affect the companys cost structure or regular sales. If Pronghorn accepts this order, by how much will its income increase or decrease?
Operating income will select an option increasedecrease by $enter a dollar amount . |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started