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06-06-2023
Business

Answered

Suki sells a hair dryer at $95 to its regional wholesalers. To manufacture the dryer, Suki will spend $20 on variable costs and $8 on fixed costs per unit. Total fixed manufacturing costs are $160,000 when produces at its full capacity of 20,000 units. A new international buyer has an offer of 1,000 units at $30 each, which would not affect its current production but would increase the fixed cost by $2,000. How much is the incremental net income if it accepts the special order?
Select one:
a.
$8,000 profit
b.
$5,000 profit
c.
$2,000 profit
d.
$10,000 profit

Answer :

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