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Win Co Produces a single product Its normal selling price is $27 0

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Win Co. Produces a single product. Its normal selling price
is $27.00 per unit. The variable costs are $15.00 per unit.
Fixed costs are $19,426.00 for a normal production run of
5,000 units per month. Win received a request for a special
order that would not interfere with normal sales. The order
was for 1,436 units and a special price of $19.00 per unit.
Win Co. has the capacity to handle the special order and,
for this order, a variable selling cost of $2 per unit would
be eliminated.
Assuming the order is accepted, determine the impact on
net income.
Select the correct answer.decrease of $11,488.00increase
of $33,179.85increase of $8,616.00increase of $27,284.00
Solution
Ans is c increase of $8,616Offered Units
1,436.00Offered Price 19.00Variable cost of
producing offered Products(15-2)
13.00Contribution per unit of Offer(SP-VC)
6.00Total contrbiution or revenue from offer(6*1,436)
8,616.00Note: We have not considered Fixed cost while
evaluating proposal as fixed cost will reamin same. It wont
be affected by Offer

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Win Co. Produces a single product. Its normal selling price is $27.00 per unit. The variable costs are $15.00 per unit. Fixed costs are $19,426.00 for a normal production run of 5,000 units per month. Win received a request for a special order that would not interfere with normal sales. The order was for 1,436 units and a special price of $19.00 per unit. Win Co. has the capacity to handle the special order and, for this order, a variable selling cost of $2 per unit would be eliminated. Assuming the order is accepted, determine the impact on net income. Select the correct answer.decrease of $1 ...
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