Benjamin Company had the following results of operations for the past year: Sales (16,000 units at...

 

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Benjamin Company had the following results of operations for the past year: Sales (16,000 units at $10) $160,000 Direct materials and direct labor $84,000 Overhead (20% variable) 24,000 Selling and administrative expenses (all fixed) 32,000 (140,000) Operating income $20,000 A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,000 units at $8.00 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $800 and selling and administrative costs by $500. Assuming Benjamin has excess capacity and accepts the offer, its total profits will be DON'T USE COMMA SEPARATORS Benjamin Company had the following results of operations for the past year: Sales (16,000 units at $10) $160,000 Direct materials and direct labor $84,000 Overhead (20% variable) 24,000 Selling and administrative expenses (all fixed) 32,000 (140,000) Operating income $20,000 A foreign company (whose sales will not affect Benjamin's market) offers to buy 4,000 units at $8.00 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $800 and selling and administrative costs by $500. Assuming Benjamin has excess capacity and accepts the offer, its total profits will be DON'T USE COMMA SEPARATORS

Answer rating: 100% (QA)

Variable cost per unit We can assume direct materials and direct labor are variable since they are l... View the full answer