Question
The result of operations for the past years for Baldwin company is as follows Sales (16,000 units@$10.25)$164,000 Direct Material and Direct Labor $100,000 Overhead (20%
The result of operations for the past years for Baldwin company is as follows
Sales (16,000 units@$10.25)$164,000
Direct Material and Direct Labor $100,000
Overhead (20% Variable)$20,000
Selling & Administrative Expenses (All fixed) $32,500($152,500)
Operating income $11,500
A foreign company whose sales will not affect Baldwin offers to buy 4500 units at $8.05 per unit. In addition to Variable Manufacturing costs. Selling these units would increase fixed overhead by $650 and Selling and Administrative cost by $350. If Baldwin accept the offer, by how much will the profit increase.
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Authors: Robert Anthony, David Hawkins, Kenneth Merchant
13th edition
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