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timurjin [86]
4 years ago
10

It costs Marigold Company $26 per unit ($18 variable and $8 fixed) to produce its product, which normally sells for $38 per unit

. A foreign wholesaler offers to purchase 6200 units at $21 each. Marigold would incur special shipping costs of $2 per unit if the order were accepted. Marigold has sufficient unused capacity to produce the 6200 units. If the special order is accepted, what will be the effect on net income? $18600 increase
Business
1 answer:
olasank [31]4 years ago
7 0

Answer:

$6,200 Increase

Explanation:

Given that,

Costs Marigold Company = $26 per unit

Fixed cost = $8

Variable cost = $18

Selling price = $38 per unit

Foreign wholesaler offers to purchase 6200 units at $21 each.

Shipping costs = $2 per unit

Effect on net income:

= Sales - Variable cost - special shipping cost

= (6,200 × $21) - (6,200 × $18) - (6,200 × $2)

= $130,200 - $111,600 - $12,400

= $6,200 Increase

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On June 15, a food wholesaler sold 100 cases of canned soup to Happy Foods for $30 per case with terms of 2/10, n/30. On June 17
Brilliant_brown [7]

Answer:

Explanation:

The journal entries are shown below:

On June 17

Food wholesaler A/c Dr $600       (20 cases × $30)

    To Purchase return $600

(Being returned goods are recorded)

Food wholesaler A/c Dr $600  $2,352

   To Bank A/c                                               $2,352

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