need help with this two questions ILL BE GIVEN FOR THE PROBLEM Boca Ine.\'s curr
ID: 2338933 • Letter: N
Question
need help with this two questions
ILL BE GIVEN FOR THE PROBLEM Boca Ine.'s current produ ct selling price is $70, variable cost per unit is $35, total fixed costs ar 1.4.30.000, and sales volume is 150,000 units. l he c mpany , c g accepting anorder to sell an additional 5,000 units for $40 per unit. Variable hat would have to be lling expenses will rise by $1 per unit because of an additional sales commission that would have paid and an additional $17,000 would need to be spent for fixed costs related to the order. By how much ild protits increase or decrease if Boca accepts this special order? S22,000 decreas b. $172,000 decrease c. S 3,000 increase d. $178,000 increase e. $183,000 increaseExplanation / Answer
Increase in profits = Sales revenues - Variable costs - Fixed costs
= (5,000 units * $40 per unit) - (5,000 units * $36 per unit) - $17,000
= $200,000 - $180,000 - $17,000
= $3,000
The answer is C.
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Weighted average unit contribution margin = (Contribution margin of printers * Sales mix) + (Contribution margin of Ink Catridges * Sales mix)
= [($80-$27)*2/8] + [($20-$11)*6/8]
= $13.25 + $6.75
= $20
Breakeven point in units = Fixed costs / Weighted average unit contribution margin
= ($150,000+$50,000) / $20
= 10,000
Printers to be sold = 10,000 units * 2/8
= 2,500
The answer is C.
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