Use this information for Falcon Co. to answer the question that follow. Falcon Co. produces a single product. Its normal selling price is $25 per unit. The variable costs are $15 per unit. Fixed costs are $18,800 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,580 units with a special price of $21 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated. If the order is accepted, what would be the impact on net income? a.increase of $10,112 b.increase of $16,432 c.decrease of $7,584 d.increase of $12,640
Use this information for Falcon Co. to answer the question that follow. Falcon Co. produces a single product. Its normal selling price is $25 per unit. The variable costs are $15 per unit. Fixed costs are $18,800 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,580 units with a special price of $21 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated. If the order is accepted, what would be the impact on net income? a.increase of $10,112 b.increase of $16,432 c.decrease of $7,584 d.increase of $12,640
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter8: Tactical Decision-making And Relevant Analysis
Section: Chapter Questions
Problem 54P
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Use this information for Falcon Co. to answer the question that follow.
Falcon Co. produces a single product. Its normal selling price is $25 per unit. The variable costs are $15 per unit. Fixed costs are $18,800 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,580 units with a special price of $21 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated.
If the order is accepted, what would be the impact on net income?
a.increase of $10,112
b.increase of $16,432
c.decrease of $7,584
d.increase of $12,640
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