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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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If a company rents a warehouse, it must pay rent for the warehouse whether it is full of inventory or completely vacant. Other e
Aleksandr [31]

As the output is increased or decreased, these (B) fixed costs remain unchanged.

<h3>What are fixed costs?</h3>
  • Fixed costs, also known as indirect costs or overhead costs in accounting and economics, are corporate expenses that are independent of the volume of goods or services generated by the business.
  • They are usually recurrent, such as monthly interest or rent.
  • These expenses are frequently capital expenses.
<h3>Explanation -</h3>
  1. Dependent refers to a variable that changes when other factors change.
  2. Fixed cost refers to a cost that doesn't change when the number of goods produced increases or decreases.
  3. Opportunity cost refers to the benefit that you would have received from the option that was not chosen.
  4. Marginal cost refers to the change in the cost when you produce an additional unit.
  5. According to this definition and as the statement refers to a cost that doesn't change.

Therefore, as the output is increased or decreased, these (B) fixed costs remain unchanged.

Know more about fixed costs here:

brainly.com/question/3636923

#SPJ4

Complete question:

If a company rents a warehouse, it must pay rent for the warehouse whether it is full of inventory or completely vacant. Other examples include executives' salaries, interest expenses, depreciation, and insurance expenses. As the output is increased or decreased, these _______ costs remain unchanged.

a. dependent

b. fixed

c. opportunity

d. marginal

5 0
2 years ago
A check for which a​ maker's bank account has inadequate money to pay the check is known as​ ________.
nevsk [136]
The answer to your question is a non-sufficient funds check.
Hope that helps! :)
6 0
3 years ago
Which expense contributes to a business’s semi-variable cost?
motikmotik

for Plato the correct answer is D. overtime (wages) paid to workers :)

6 0
3 years ago
An agreement that requires employees to settle disputes with their employer using arbitration instead of a lawsuit is known as
Reil [10]

Answer:

An arbitration agreement is a contract in which you and your employer agree that certain disputes will be decided in arbitration, not litigation. When you sign a binding arbitration agreement, you are giving up your right to go to court.

Explanation:

6 0
2 years ago
Loni owns a software company and has a great idea for a new app. In order to build the app, she will need to hire a computer exp
never [62]

Answer:

No, Loni should not take the loan and build the app.

Explanation:

If she borrows $87,000 to build the app, at the end of the year she will have to pay $87,000 x (1+0.15) = 100,050 in principal and interest to the bank.

After selling the app she will get 99,000 - 100,050 = $1,050.

In other words, she will be making a loss.

6 0
3 years ago
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