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Question

Ó Qe 82% D Thu 12:22 PM Q Q = Chrome File Edit View History Bookmarks People Window Help Take a Test - Anna Fischer * Grades - XLS GP_LE A Secure | https://www.mathxl.com/Student/PlayerTest.aspx?testid=175222174&centerwin;=yes - C o openvellum ACCT2102 Spring 2018 F Anna Fischer | 3/22/18 12:21 PM E Anna oe Submit Quiz Quiz: Chapter 8 quiz MyLab Accounting This Question: 1 pt O Main Menu ( 3 of 9 (0 complete) This Quiz: 9 pts possible 1 of 1 see score Assignments see score Do Homework Tom Industries has a plant capacity of 70,000 units and current production is 55,000 units. At this production volume the variable cost per unit is $30, and the fixed cost per unit is $4,10 per unit. The normal selling price of Tom's product is $45 per unit. Tom Industries has been asked by Sadie, Inc., to fill a special order for 10,000 units of the product at a special sales price of $40 each. Sadie, Inc. will market the units in a foreign country under its own brand name; the special order is not expected to have any effect on Tom's regular sales. However, Tom Industries will have to pay an export attorney a fee of $15,000 to make sure it is complying with export laws and regulations relating to the special order. Take a Quiz/Test 2 of 2 see score see score What impact will accepting the special order have on Tom's operating income? O A. Accepting the special order will decrease Tom's operating income. O B. Accepting the special order will increase Tom's operating income. OC. Accepting the special order will not impact Tom's operating income. 1 of 1 see score By how much will operating income change if the special order is accepted? (enter an absolute dollar amount) Change in Operating Income $ - 0 of 2 0 of 2 Click to select your answer(s). EN 909 9 SP 22 0 6 = 0 w x1 P9E DU 22

Explanation / Answer

Answer:

Sales (10,000*40)

400000

less:

variable cost (10,000*30)

300000

Export attorney fees

15000

Net profit /Loss

85000

Accepting a special order will increase Tom's Operating income

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If Tom's accept the special order the his operating income increase by $85,000