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algol [13]
2 years ago
6

The following information relates to a product produced by Orca Company: Fixed selling costs are $1,000,000 per year. Although p

roduction capacity is 500,000 units per year, Orca expects to produce only 400,000 units next year. The product normally sells for $80 each. A customer has offered to buy 60,000 units for $60 each. The customer will pay the transportation charge on the units purchased. If Orca accepts the special order, the effect on operating profits would be a:
Business
1 answer:
julia-pushkina [17]2 years ago
4 0

Answer,:

increase in operating income by $840,000

Explanation:

The computation is shown below:

Offer price per unit $60

Less: Variable costs per unit:  

  Direct materials ($20)

  Direct labor ($14)

  Variable overhead ($12)

  Variable selling $0

Incremental profit per unit (a) $14

Units offered to sell (b) 60,000

Effect on Operating Income (Increase) (a × b) $840,000

Therefore, in the case when the special order is accepted, the effect on operating income would be increase by $840,000

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Anarel [89]

Answer:

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Explanation:

7 0
3 years ago
Read 2 more answers
Bonds are a form of ________, with bond prices and interest rates that move in _________ . a. equity; the same direction b. equi
forsale [732]

Answer:

(d) debt; opposite direction

Explanation:

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7 0
3 years ago
The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year. Compute the number of units
juin [17]

Answer:

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5 0
3 years ago
Production possibilities: 1) the study of how best to allocate scarce resources among competing uses. 2) shows the relationship
Ymorist [56]
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2 years ago
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Answer:

<u>A</u>

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-Both firms maximize the profit equating the marginal revenue (MR) with the marginal cost (MC). i) Is correct

-MR is equal to the price, but not in the monopoly. The monopolist can planify and impose the price. Then ii) is incorrect

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- <em>Average revenue (AR) = Price (P) </em>

<em>AR= Revenue/Quantity</em>

<em>AR= P x Q / Q</em>

<u><em>AR= P    -------------------------> </em></u><em> iv) Is correct!</em>

                                           

4 0
3 years ago
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