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erastovalidia [21]
3 years ago
7

It costs Garner Company $12 of variable and $5 of fixedcosts to produce one bathroom scale which normally sells for $35. Aforeig

n wholesaler offers to purchase 2,000 scales at $15 each.Garner would incur special shipping costs of $1 per scale if theorder were accepted. Garner has sufficient unused capacity toproduce the 2,000 scales. If the special order is accepted, whatwill be the effect on net income?
A. $6,000 decrease
B. $4,000 decrease
C. $30,000 increase
D. $4,000 increase
Business
1 answer:
Anettt [7]3 years ago
4 0

Answer:

D. $4,000 increase

Explanation:

Net Income = Sales revenue - Variable costs - Special costs (for executing this order)

15 X 3,000 - 12 X 3,000 - 1 X 3,000

Or, Net Income = 30,000 - 24,000 - 2,000

Or, Net Income = 4,000

Thus, option D is the correct answer.

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4 0
2 years ago
For the current year ended October 31, Friedman Company expects fixed costs of $14,300,000, a unit variable cost of $250, and a
Nana76 [90]

Explanation:

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so 14,300000/380-250

14,300000/130 = 110,000 units to be able to make break even

5 0
4 years ago
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butalik [34]

It is true that because of the substitution problem, the CPI tends to overstate the true change in the price of the typical basket of consumer goods.

<h3>What is CPI?</h3>
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7 0
1 year ago
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