Rexeleg Company manufactures a product with the following costs per unit at the expected production of 40,000 units:
Direct materials $5
Direct labor 10
Variable overhead 7
Fixed overhead 9
The company has the capacity to produce 50,000 units. The product regularly sells for $50. A wholesaler has offered to pay $43 per unit for 3,000 units.
If the firm chooses to accept the special order and reject some regular sales, the effect on operating income would be a:
a.$30,000 increase.
b.$45,000 decrease.
c.$64,000 increase.
d.$21,000 decrease.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Rexeleg Company manufactures a product with the following costs per unit at the expected production of 40,000 units: Direct materials $5 ...” 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
Komali, the founder of astro computing, believes in employee empowerment, so as soon as she began hiring managers, she made subordinate reviews part of her company's performance appraisal system.
Answers (1)
B&T Company's production costs for May are: direct labor, $16,000; indirect labor, $6,800; direct materials, $15,300; property taxes on production facility, $830; factory heat, lights and power, $1,030; and insurance on plant and equipment, $230.
Answers (1)
What does deficit spending require a government to do? a lay off workersb cut taxes c take on debtd hire more workers
Answers (2)
In 2010, a small country imported goods worth $500 billion and exported goods worth $443 billion. it exported services worth $248 billion and imported services worth $330 billion.
Answers (1)
Many believe that technology is very costly to create, but cheap to transfer. For example, think of the personal computer. The technology underpinning the personal computer took a generation of time and a ton of money to create.
Answers (1)
New Questions in Business
What are barriers to entry?
Answers (1)
Four fundamental factors affect the cost of money: (1) the return that borrowers expect to earn on their investments.
Answers (1)
You can avoid storage and assaying problems by investing in
Answers (2)
Work teams often assume many activities traditionally reserved for managers. Which of the following is one of the responsibilities of work teams?
Answers (1)
After an intensive research and development effort, two methods for producing playing cards have been identified by the Turner Company. One method involves using a machine having a fixed cost of $10,000 and variable costs of $1.00 per deck of cards.
Answers (1)