Sorry! If the image is too small, you may right click it and select \"open in ne

Question

Sorry! If the image is too small, you may right click it and select "open in new tab" to make it bigger.

Gwinnett Barbecue Sauce Corporation manufactures a specialty barbecue sauce. Gwinnett has the capacity to manufacture and sell 10,000 cases of sauce each y selling 9,000. The following costs relate to annual operations at 9,000 cases Variable manufacturing cost Fixed manufacturing cost Variable selling and administrative Fixed selling and administrative Total Cost $135,000 $45,000 $18,000 $27,000 cost Gwinnett normally sells its sauce for $29 per case. A local school district is interested in purchasing Gwinnett's excess capacity of 1,000 cases of sauce but only if special order would not affect regular sales or total fixed costs or variable costs per unit. If this special order is accepted, Gwinnett's profits for the year will: O decrease of $4,800 O decrease of $2,000 O decrease of $14,000 o decrease of 7,500

Explanation / Answer

Per unit Total Incremental revenue 15 15000 Incremental costs: Variable manufacturing cost 15 15000 Variable selling and administrative 2 2000 Total Incremental costs 17 17000 Incremental income(loss) -2000 Option 2 decrease of $2000 is correct

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.