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inessss [21]
3 years ago
7

Braizen, Inc. produces a product with a $30 per-unit variable cost and an $80 per-unit sales price. Fixed manufacturing overhead

costs are $100,000. The firm has a one-time opportunity to sell an additional 1,000 units at $60 each that would not affect its current sales. Assuming the company has sufficient capacity to produce the additional units, how would the acceptance of the special order affect net income?
Business
1 answer:
marysya [2.9K]3 years ago
4 0

Answer:

Net income will increase by $30,000

Explanation:

In this case the company has already made its regular sales and charged the entire fixed cost, also provided that the additional units can be produced, as the company has sufficient capacity, which means no additional fixed cost will be incurred. In that case, entire contribution margin from this sale will be added to increase the net income from regular sales.

Special order quantity = 1,000 units

Contribution= $60 - $30 = $30 per unit.

Total contribution from special order = 1,000 X $30 = $30,000

Now by this amount of $30,000 net income will increase.

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Rodriguez Corporation issues 18,000 shares of its common stock for $174,800 cash on February 20. Prepare journal entries to reco
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Answer:

a.

Date              Account Title                                                   Debit           Credit

Feb. 20         Cash                                                            $174,800

                     Common stock                                                              $144,000

                     Paid-In Cap. in excess of par                                          $30,800

<u>Working</u>

Common stock = 18,000 * 8

= $144,000

Paid-in cap. = 174,800 - 144,000

= $30,800

b.

Date              Account Title                                                   Debit           Credit

Feb. 20         Cash                                                            $174,800

                     Common stock                                                              $174,800

c.

Date              Account Title                                                   Debit           Credit

Feb. 20         Cash                                                            $174,800

                     Common stock                                                               $72,000

                     Paid-In Cap. in excess of par                                       $102,000

<u>Working</u>

Common stock = 4 * 18,000 = $72,000

Paid in cap = 174,000 - 72,000 = $102,000

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Answer:

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