If Ayayai accepts this order, by how much will its income increase or decrease?
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 13P: Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income...
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The following operating information reports the results of Ayayai Company’s production and sale of 12,500 air-conditioned motorcycle helmets last year. Based on early market forecasts , Ayayai expects the same results this year.
The American Motorcycle Club has offered to purchase 1,600 helmets at a price of $100 each. Ayayai has sufficient idle capacity to fill the order, which would not affect the company’s cost structure or regular sales.
If Ayayai accepts this order, by how much will its income increase or decrease?
Sales | $2,026,000 | ||
Variable manufacturing expenses | 862,000 | ||
Fixed manufacturing expenses | 279,000 | ||
Variable selling and administrative expenses | 112,000 | ||
Fixed selling and administrative expenses | 229,000 |
The American Motorcycle Club has offered to purchase 1,600 helmets at a price of $100 each. Ayayai has sufficient idle capacity to fill the order, which would not affect the company’s cost structure or regular sales.
If Ayayai accepts this order, by how much will its income increase or decrease?
Operating income will select an option decreaseincrease by $enter a dollar amount . |
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