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Crazy boy [7]
3 years ago
10

It costs Waterway 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 5400 units at $21 each.

Waterway would incur special shipping costs of $2 per unit if the order were accepted.

Waterway has sufficient unused capacity to produce the 5400 units.

If the special order is accepted, what will be the effect on net income?
Business
1 answer:
sasho [114]3 years ago
3 0

Answer:

Effect in income= $5,400

Explanation:

Giving the following information:

It costs Waterway Company $26 per unit ($18 variable and $8 fixed) to produce its product.

A foreign wholesaler offers to purchase 5400 units at $21 each.

Waterway would incur special shipping costs of $2 per unit if the order were accepted.

Waterway has sufficient unused capacity to produce the 5400 units.

Because it is a special offer and there is unused capacity, we will not have into account the fixed costs.

Unitary cost= $18 + $2= $20

Effect in income= 5,400*(21 - 20)= $5,400

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Answer:

A. new plants and equipment purchased by a firm.

Explanation:

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3 years ago
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A firm will work with a customer to design the product, and then make it from purchased materials, parts, and components. this firm is called <u>a make order firm.</u>

<u />

A firm is a for-profit business, generally formed as a partnership that provides professional services, along with criminal or accounting offerings. The theory of the firm posits that firms exist to maximize profits.  The term firm is synonymous with enterprise or organization. firms can operate beneath several distinct structures, including sole proprietorships and corporations.

In income, commerce, and economics, a customer is a recipient of a good, service, product, or idea - obtained from a seller, vendor, or supplier via a monetary transaction or change for money or some other valuable consideration.

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8 0
2 years ago
Sam's Pizza is considering a new store location. For accounting purposes, fixed operating costs for a store are $245,000 a year,
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Answer:

33,793   pizzas

Explanation:

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fixed costs=$245,000

contribution margin per pizza=selling price-variable cost

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variable cost=selling price*42%

variable cost=$12.50*42%

variable cost=$5.25

contribution margin per pizza=$12.50-$5.25 =$7.25

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