Jade Ltd. manufactures a product, which regularly sells for $66. This product has the following...
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Accounting
Jade Ltd. manufactures a product, which regularly sells for $66. This product has the following costs per unit at the expected production of 48518 units:
Direct labour
$15
Direct materials
9
Manufacturing overhead (37% is variable)
24
The company has the capacity to produce 51625 units. A wholesaler has offered to pay $56 for 12218 units.
If Jade Ltd. accepts this special order, operating income would increase (decrease) by:
Select one:
a. $282480
b. $97744
c. $-19276
d. $-6625
The Peterson Corporation manufactures a product that it sells for $68.70. The variable costs are $40.88 and the annual fixed costs are $971459. Petersons capacity is 106288 units per year but is currently only selling 88260 units per year. This is not expected to change in the future.
Peterson was approached to provide 32083 units as a one-time order for a price of $45.64 per unit. If Peterson accepts the special order, what will be the impact on operating income?
Select one:
a. $-497282
b. $739834
c. $152715
d. $-238295
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