Stryker Industries received an offer from an exporter for 15,000 units of product at $17.50 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:

Domestic unit sales price $20

Unit manufacturing costs:

Variable 11

Fixed 1

1. What is the amount of income or loss from acceptance of the offer?

a. $94,500 loss

b. $97,500 income

c. $37,500 loss

d. $37,500 income

Question

Colt Villarreal

Business

18 December, 18:42

Stryker Industries received an offer from an exporter for 15,000 units of product at $17.50 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:

Domestic unit sales price $20

Unit manufacturing costs:

Variable 11

Fixed 1

1. What is the amount of income or loss from acceptance of the offer?

a. $94,500 loss

b. $97,500 income

c. $37,500 loss

d. $37,500 income

+5

Answers (1)

Know the Answer?

Maria · Answer 1

The correct answer is B.

Explanation:

Giving the following information:

Stryker Industries received an offer from an exporter for 15,000 units of product at $17.50 per unit.

Unit manufacturing costs:

Variable 11

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

Effect on income = 15,000*17.5 - 15,000*11 = $97,500