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ruskin ruskin
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6 years ago
Ratzlaff Company has a current production level of 20,000 units per month. Unit costs at this level are:

Direct materials   $0.25
Direct labour   0.40
Variable overhead   0.15
Fixed overhead   0.20
Marketing - fixed   0.20
Marketing/distribution - variable   0.40

Current monthly sales are 18,000 units. Jim Company has contacted Ratzlaff Company about purchasing 1,500 units at $2.00 each. Current sales would NOT be affected by the one-time-only special order, and variable marketing/distribution costs would NOT be incurred on the special order. What is Ratzlaff Company's change in operating profits if the special order is accepted?
A) $400 increase in operating profits
B) $400 decrease in operating profits
C) $1,800 increase in operating profits
D) $1,800 decrease in operating profits
E) $1,500 increase in operating profits
Textbook 
Cost Accounting: A Managerial Emphasis, Canadian Edition

Cost Accounting: A Managerial Emphasis, Canadian Edition


Edition: 7th
Authors:
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GarretAGarretA
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ruskin Author
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6 years ago
Brilliant ツ
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