Respuesta :
Answer:
c)$3,000 decrease
Explanation:
The sales less the variable cost gives the contribution margin. The contribution margin less the fixed cost gives the net operating income.
Considering the data given with respect to the special order, the net income would be equal to the sales less the additional cost which are variable and fixed.
net profit/(loss) from order
= 1000 ($15 - $5 - $12 - $1)
= ($3000)
Answer:
a)$2,000 increase
Explanation:
As fixed cost is the irrelevant expense in the decision making for the special order. It is avoidable cost.
Special Order
Quantity 1000 scales
Price $15 per sale
Less: Variable cost $12 per sale
Less: Shipping cost $1 per sale
Contribution margin $2 per scale
Total Contribution margin = 1,000 scales x $2 per scale = $2,000
Net Income will increase by $2,000 if the special order is accepted.