Question: At Bargain Electronics, it costs $31 per unit ($18 variable and $13 fixed) to make an MP3 player at full capacity that normally sells for
At Bargain Electronics, it costs $31 per unit ($18 variable and $13 fixed) to make an MP3 player at full capacity that normally sells for $46. A foreign wholesaler offers to buy 4,010 units at $29 each. Bargain Electronics will incur special shipping costs of $3 per unit. Assuming that Bargain Electronics has excess operating capacity, indicate the net income (loss) Bargain Electronics would realize by accepting the special order. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
| Reject Order | Accept Order | Net Income Increase (Decrease) | |||||
| Revenues | $ | $ | $ | ||||
| Costs-Manufacturing | |||||||
| Shipping | |||||||
| Net income | $ | $ | $ |
| The special order should be rejectedaccepted . |
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