Minnesota Manufacturing has an opportunity to export 2 , 0 0 0 units of its product to
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Question:
Minnesota Manufacturing has an opportunity to export units of its product to a foreign country. The current selling price is $ but the special order will be sold at a unit price of $ This special order will not affect its current sales, all of which are domestic. Freight and shipping costs of $ per unit would be incurred on the foreign order. Current variable manufacturing costs are $ per unit manufactured, and variable selling and administrative costs are $ per unit sold. Included in variable selling expenses is a sales commission of $ per unit, which would not apply to the foreign order. Fixed manufacturing costs are $ per year and fixed selling and administrative expenses are $ per year.
Required:
The company now manufactures and sells units per year. What is the effect on profits if the special order is taken?
Related Book For
College Accounting Chapters 1-30
ISBN: 978-0077862398
14th edition
Authors: John Price, M. David Haddock, Michael Farina
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