Question

Wok Around the clock, Inc., sells specialty woks. In the current year it expects to incur $780,000 in variable costs and $110,000 in fixed costs to make and sell 10,000 woks at $100 each. If Wok Around the clock accepts a special order from Hard Wok Cafe to purchase 1,000 woks at $75 each plus $1,200 in shipping costs, how much would it make or lose on this special order? ENTER A LOSS WITH A "-"SIGN. DO NOT USE PARENTHESES OR DOLLAR SIGNS. EXAMPLE: -1,000

Answer 1

Question

Answer :

Loss - 4200 would it make on this special order

	Per unit	Specially Works	Per unit for Special Order	Special Order
Units		10000		1000
Sales	$100	$10,00,000	$75	$75,000
Less: Variable cost	$78	$7,80,000	$78	$78,000
Contribution	$22.00	$2,20,000	-$3.00	-$3,000
Less: Fixed Cost		$1,10,000		$0
Shipping costs				$1,200
operating Profit/ (loss)		$1,10,000		-$4,200