Cecil Incorporated provided the following information regarding its only product: Sale price per unit Direct materials...
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Cecil Incorporated provided the following information regarding its only product: Sale price per unit Direct materials used Direct labor incurred Variable manufacturing overhead Variable selling and administrative expenses Fixed manufacturing overhead Fixed selling and administrative expenses Units produced and sold $50.00 $16,500 $186,000 $125,000 $70,000 $65,000 $12,000 21,000 Assume no beginning inventory Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 3,500 units at a sale price of $41 per product assuming additional fixed manufacturing overhead costs of $5,200 is incurred? (NOTE: Assume regular sales are not affected by the special order. Round any intermediary calculations to the nearest cent.) O A. Increase by $77,245 O B. Decrease by $72,045 O C. Increase by $143,500 O D. Increase by $72,045 Cecil Incorporated provided the following information regarding its only product: Sale price per unit Direct materials used Direct labor incurred Variable manufacturing overhead Variable selling and administrative expenses Fixed manufacturing overhead Fixed selling and administrative expenses Units produced and sold $50.00 $16,500 $186,000 $125,000 $70,000 $65,000 $12,000 21,000 Assume no beginning inventory Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 3,500 units at a sale price of $41 per product assuming additional fixed manufacturing overhead costs of $5,200 is incurred? (NOTE: Assume regular sales are not affected by the special order. Round any intermediary calculations to the nearest cent.) O A. Increase by $77,245 O B. Decrease by $72,045 O C. Increase by $143,500 O D. Increase by $72,045
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Excess capacity is profitable if it is able to recover the variable cos... View the full answer
Related Book For
Cost Management A Strategic Emphasis
ISBN: 978-0077733773
7th edition
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
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