Business, 14.12.2019 01:31 asherkbohannan

Wade company is operating at 75% of its manufacturing capacity of 140,000 product units per year. a customer has offered to buy an additional 20,000 units at $32 each and sell them outside the country so as not to compete with wade. the following data are available:

costs at 75% capacity: per unit total
direct materials $12.00 $1,260,000
direct labor 9.00 945,000
overhead (fixed and variable) 15.00 1,575,000
totals $36.00 $3,780,000

in producing 20,000 additional units, fixed overhead costs would remain at their current level but incremental variable overhead costs of $6 per unit would be incurred. what is the effect on income if wade accepts this order?

a) income will increase by $3.80 per unit.
b) income will decrease by $7.60 per unit.
c) income will decrease by $34.20 per unit.
d) income will increase by $11.40 per unit.
e) income will increase by $7.60 per unit.

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Wade company is operating at 75% of its manufacturing capacity of 140,000 product units per year. a...

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