It costs Lindsey Fields $14 of variable costs and $6 of allocated fixed costs to produce an industrial trash can that sells for $30. A buyer in Mexico offers to purchase 3,000 units at $18 each. Lindsey has excess capacity and can handle the additional production. 

What effect will acceptance of the offer have on net income?

Question 

increase $4,000 

decrease $4,000 

increase $12,000 

increase $54,000

Answer rating: 100% (QA)

Variable cost is a cost which varies with the level of output While the fixed cost is a cos... View the full answer