O'Brien Company sells mopeds for $450 each. The company currently sells 4,450 mopeds per year and...
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O'Brien Company sells mopeds for $450 each. The company currently sells 4,450 mopeds per year and could make as many as 4,770 mopeds per year. The mopeds cost $255 each to make: $175 in variable costs per moped and $80 of fixed costs per moped. O'Brien received an offer from a potential customer who wants to buy 320 mopeds for $420 each. Incremental fixed costs to make this order are $49,000. No other costs will change if this order is accepted. Compute O'Brien's additional income (ignore taxes) if it accepts this order. Contribution margin Incremental Amount per Unit Incremental income (loss) from new business The company should Incremental Fixed Costs Incremental Income from New Business O'Brien Company sells mopeds for $450 each. The company currently sells 4,450 mopeds per year and could make as many as 4,770 mopeds per year. The mopeds cost $255 each to make: $175 in variable costs per moped and $80 of fixed costs per moped. O'Brien received an offer from a potential customer who wants to buy 320 mopeds for $420 each. Incremental fixed costs to make this order are $49,000. No other costs will change if this order is accepted. Compute O'Brien's additional income (ignore taxes) if it accepts this order. Contribution margin Incremental Amount per Unit Incremental income (loss) from new business The company should Incremental Fixed Costs Incremental Income from New Business
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Related Book For
Managerial Accounting Creating Value in a Dynamic Business Environment
ISBN: 978-0078025662
10th edition
Authors: Ronald Hilton, David Platt
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