Brief Exercise 20-3

At Bargain Electronics, it costs $30 per unit ($20 variable and $10 fixed) to make an MP3 player at full capacity that normally sells for $55. A foreign wholesaler offers to buy 4,960 units at $24 each. Bargain Electronics will incur special shipping costs of $4 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

OrderAccept

OrderNet Income

Increase (Decrease)Revenues$

$

$

Costs-Manufacturing

Shipping

Net income$

$

$

The special order should be rejectedaccepted

.