ty
Incremental revenue(8,000×$14) | $112,000 |
Incremental variable costs($12×8,000) | ($96,000) |
Incremental shipping costs($1×8,000) | ($8,000) |
Incremental profit if special order accepted | $8,000 |
Pederson Enterprises produces giant stuffed bears. Each bear consists of $12 of variable costs and $9 of fixed costs and sells for $45. A wholesaler offers to buy 8,000 units at $14 each, of which Pederson has the capacity to produce. Pederson will incur
$1.20 variable cost $.90 fixed cost sells for $4.50 A company offers to buy 8,000 units at $1.40 each incur extra shipping cost of $0.10 per unit Determine the incremental income or loss by accepting the special offer