Use the following to answer the next two questions:

Cartwright Company is considering whether it should produce 8,000 units requested in a special order from a customer. The company has the capacity to produce the additional units without cutting into its existing sales. Cartwright estimates the following costs to produce one unit:

Direct material $4.00

Direct labor 3.00

Variable Mfg. Overhead .50

Fixed Mfg. Overhead 2.00

The special order calls for a selling price of $8.00 per unit; the normal selling price is $15.00 per unit.

If Cartwright takes the special order, how will it impact the companys income?

Multiple Choice

• no effect

• increase of $2,000

• increase of $4,000

• decrease of $6,000

Use the following to answer the next two questions:

Cartwright Company is considering whether it should produce 8,000 units requested in a special order from a customer. The company has the capacity to produce the additional units without cutting into its existing sales. Cartwright estimates the following costs to produce one unit:

Direct material $4.00

Direct labor 3.00

Variable Mfg. Overhead .50

Fixed Mfg. Overhead 2.00

The special order calls for a selling price of $8.00 per unit; the normal selling price is $15.00 per unit.

At what selling price is Cartwright indifferent about taking the special order?

Multiple Choice

• $7.00

• $7.50

• $8.00

• $9.00