Question

The company has received an offer from an exporter for 9,000 units of toys at $60 per unit. The additional business is not expected to affect the normal production or domestic sales prices of Playtime Inc. What is the amount of gain or loss from acceptance of the offer

Answer 1

Answer:

gain = $45000

Explanation:

given data

exporter = 9,000 units

toys per unit =  $60

we consider

Domestic unit sales price   = $50

Unit manufacturing costs:

Variable   = 10

Fixed    = 8

solution

as we know that fix cost never change by any offer or off or sale

so contribution margin will be gain or loss

so here contribution is

contribution = $60 - $10

contribution = $50

so gain will be

gain = $50 × 900 units

gain = $45000