Ask Question
BusinessBusiness
10 January, 23:16

Missouri Company has a current production capacity level of 200,000 units per month. At this level of production, variable costs are $0.60 per unit and fixed costs are $0.50 per unit. Current monthly sales are 173,000 units. Gates Company has contacted Missouri Company about purchasing 20,000 units at $1.00 each. Current sales would not be affected by the special order and no additional fixed costs would be incurred on the special order. If the order is accepted, what is Missouri Company's change in profits? a $8,000 decreaseb $10,000 increasec $8,000 increased $10,000 decrease

+2
Answers (1)
  1. 10 January, 23:26
    0
    If the order is accepted, Missouri Company's change in profits: c $8,000 increase

    Explanation:

    Gates Company want to purchased 20,000 units at $1.00 each. Current sales would not be affected by the special order and no additional fixed costs would be incurred on the special order.

    Total sales of the special order = $1.00 x 20,000 = $20,000

    Variable costs are $0.60 per unit.

    Total Variable costs of the special order = $0.60 x 20,000 = $12,000

    Profit from the special order = Total sales - Total Variable costs = $20,000 - $12,000 = $8,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Missouri Company has a current production capacity level of 200,000 units per month. At this level of production, variable costs are $0.60 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
In 2002, the U. S. Fish and Wildlife Service proposed banning imports of beluga caviar to protect the beluga sturgeon in the Caspian and Black seas, whose sturgeon population had fallen 90% in the last two decades.
Answers (1)
Calculate working capital and current ratio Firm O has accounts receivable of $31,000, cash of $14,600, property, plant, and equipment of $320,000, merchandise inventory of $43,200, accounts payable of $22,100, other accrued liabilities of $7,500,
Answers (1)
Norma receives an increase in her nominal income. she complains that the current inflation rate of six percent erodes the real purchasing power of her additional nominal income. this is true
Answers (1)
27) Which one of the following will yield a measured price elasticity of demand of 5.0? A 10 percent rise in price results in a A) 10 percent decrease in quantity demanded. B) 5 percent decrease in quantity demanded.
Answers (2)
Charter bank pays a 5.00% nominal rate on deposits, with monthly compounding. what effective annual rate (eff%) does the bank pay?
Answers (1)
New Questions in Business
Companies can adapt their catalog revenue model online by replacing or supplementing their print catalogs with information on their Web sites. True False
Answers (1)
The United Kingdom produces computers and sells them to Japan. At the same time Japan produces cars and sells them to the United Kingdom. Suppose there is an appreciation in the pound. This will cause: A.
Answers (1)
When obtaining a mortgage, in order to not be taken, paying a much higher rate than neccessary, which can easily cost well over 100,000 additional dollars over the life of the loan, the authors recommend getting a minimum of how many quotes?
Answers (1)
Amber wants to apply for a job vacancy. She calls the recruiter who advertised this vacancy to learn more about the job. The recruiter gives some background information about the positive and negative qualities of the job to Amber.
Answers (1)
What is trade discount
Answers (2)
Home » Business » Missouri Company has a current production capacity level of 200,000 units per month. At this level of production, variable costs are $0.60 per unit and fixed costs are $0.50 per unit. Current monthly sales are 173,000 units.
Sign Up Forgot Password?