Ellis Television makes and sells portable televisions. Each television regularly sells for $250. The following cost...
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Ellis Television makes and sells portable televisions. Each television regularly sells for $250. The following cost data per television are based on full capacity of 10,000 televisions produced and sold each period. $80 Direct materials.. Direct labor..... $60 Factory overhead (70% variable).. ...$40 $25 Selling expenses (60% variable)... A customer in Scotland has offered Ellis $200 each for 2,000 televisions. The only selling costs that would be incurred on this special order would be $6 per television for shipping. Ellis currently is selling 9,000 televisions through regular channels each period; acceptance of the order thus would require giving up 1,000 units of regular sales. What effect would acceptance of the special order have on Ellis Television's operating income? A. $7,000 increase $52,000 increase B. C. $11,000 decrease D. $15,000 decrease Ellis Television makes and sells portable televisions. Each television regularly sells for $250. The following cost data per television are based on full capacity of 10,000 televisions produced and sold each period. $80 Direct materials.. Direct labor..... $60 Factory overhead (70% variable).. ...$40 $25 Selling expenses (60% variable)... A customer in Scotland has offered Ellis $200 each for 2,000 televisions. The only selling costs that would be incurred on this special order would be $6 per television for shipping. Ellis currently is selling 9,000 televisions through regular channels each period; acceptance of the order thus would require giving up 1,000 units of regular sales. What effect would acceptance of the special order have on Ellis Television's operating income? A. $7,000 increase $52,000 increase B. C. $11,000 decrease D. $15,000 decrease
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Correct Option is D 15000 decrease Working Selling Price for speci... View the full answer
Related Book For
Cost Management A Strategic Emphasis
ISBN: 978-0078025532
6th edition
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
Posted Date:
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