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Home Q & A Board Other Fields Homework Help Business Accounting
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bernie2981 bernie2981
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8 years ago
Samson Incorporated provided the following information regarding its only product:

Sale price per unit   $50.00
Direct materials used   $160,000
Direct labor incurred   $185,000
Variable manufacturing overhead   $120,000
Variable selling and administrative expenses   $70,000
Fixed manufacturing overhead   $65,000
Fixed selling and administrative expenses   $12,000
Units produced and sold   20,000
   
Assume no beginning inventory   

Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 3,000 units at a sale price of $45 per product assuming additional fixed manufacturing overhead costs of $5,000 is incurred? (NOTE: Assume regular sales are not affected by the special order.)
A) Decrease by $49,750
B) Increase by $49,750
C) Increase by $54,750
D) Increase by $135,000
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
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nucleinuclei
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8 years ago
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bernie2981 Author
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#2
8 years ago
You're such a dedicated member, I very much appreciate the help.

Marking this solved ✓
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