Question: At Bargain Electronics, it costs $33 per unit ($17 variable and $16 fixed) to make an MP3 player that normally sells for $40. A foreign
At Bargain Electronics, it costs $33 per unit ($17 variable and $16 fixed) to make an MP3 player that normally sells for $40. A foreign wholesaler offers to buy 4,000 units at $30 each. Bargain Electronics will incur special shipping costs of $2 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 | $enter revenues in dollars | $enter revenues in dollars | $enter revenues in dollars | ||||
| CostsVariable manufacturing | enter variable manufacturing costs in dollars | enter variable manufacturing costs in dollars | enter variable manufacturing costs in dollars | ||||
| Shipping | enter shipping costs in dollars | enter shipping costs in dollars | enter shipping costs in dollars | ||||
| Net income | $enter net income in dollars | $enter net income in dollars | $enter net income in dollars |
| The special order should be select an option rejected/accepted. |
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