Question
The product has variable manufacturing costs of $ 8.50 per unit and fixed manufacturing costs of $ 2.00per unit? (based on $ 200000 total fixed
The product has variable manufacturing costs of $ 8.50 per unit and fixed manufacturing costs of $ 2.00per unit? (based on $ 200000 total fixed costs at current production of 100000?units). Therefore, total production cost is $ 10.50per unit. Thomas Company receives an offer from WesleyCompany to purchase 5000 units for $ 9.00each. Selling and administrative costs and future sales will not be affected by the? sale, and Thomas does not expect any additional fixed costs. Company makes a product that regularly sells for $ 12.50per unit. If Thomas Company has excess? capacity, should it accept the offer from Wesley ?? If Thomas Company has excess? capacity, should it accept the offer from Wesley ?? If Thomas Company has excess? capacity, should it accept the offer from Wesley ?? What is expected increase in revenue, variable manufacturing cost, increase/decrease in operating income?
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