Question 1 Maize Company incurs a cost of $34.00 per unit, of which $19.00 is va

Q: Question 1 Maize Company incurs a cost of $34.00 per unit, of which $19.00 is va

Answer Reject Accept Net Income Increase (decrease) Revenues 0 $150000 $150000 Costs 0 $100000 $-100000 Net Income 0 $50,000 $50,000 Maize Company should ACCEPT the special order. Reject Accept Net Income Increase (decrease) Revenues 0 $150000 $150000 Costs 0 $100000 $-100000 Net Income 0 $50,000 $50,000

ID: 2526797 • Letter: Q

Question

Question 1 Maize Company incurs a cost of $34.00 per unit, of which $19.00 is variable, to rmake a product that normally sells for $57.00. A foreign wholesaler offers to buy 5,000 units at $30.00 each. Maize will incur additional costs of $1.00 per unit to imprint a logo and to pay for shipping. Compute the increase or decrease in net income Maize wi realize by accepting the special order, assuming Maize has sufficient excess operating capacity. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Reject Accept Revenues Costs Net income Should Maize Company accept the special order? Maize company should the special order.

Explanation / Answer

Answer

Reject

Accept

Net Income Increase (decrease)

Revenues

$150000

Costs

$100000

$-100000

Net Income

$50,000

Maize Company should ACCEPT the special order.