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Onxy Onxy
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7 years ago
The manager at the Plymouth Manufacturing Company reported a current production level of 22,000 units per month. The managerial accountant reported the following unit-level costs:

Direct materials   $0.30
Direct labor   0.45
Variable overhead   0.18
Fixed overhead   0.20
Marketing-fixed   0.20
Marketing/Distribution/Variable   0.40

The manager reported monthly sales of 20,000 units. The Salem Company contacted the manager at Plymouth Manufacturing and inquired about the purchase of 1,525 units at $2.10 per unit. The manager noted that current sales would not be affected by the one-time-only special order, and variable marketing/distribution costs would not be incurred with the special order. What is the change in operating profits at Plymouth Manufacturing Company's if the special order is accepted?
A) $1,525 decrease
B) $1,525 increase
C) $1,784.25 decrease
D) $1,784.25 increase
E) There is no change in operating profits
Textbook 
Managerial Accounting: Decision Making and Motivating Performance

Managerial Accounting: Decision Making and Motivating Performance


Edition: 1st
Authors:
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noitulovenoitulove
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Onxy Author
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#2
6 years ago
This subject killed me, thanks you for sharing your expertise
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