Assume that Bharu is manufacturing and selling at capacity (5,000 units). Any special order will mean a loss of regular sales. Under these conditions if the special order from Woolgar Symphony Orchestra is accepted, the financial advantage (disadvantage) Bharu for the year should be:

Respuesta :

Answer:

$40,000

Explanation:

Note: See missing word below

                                                     Per unit        Total 200 units

Incremental revenue                        350                       $70,000

Incremental costs:

Variable manufacturing costs          130        $26,000

Variable Selling & admin. costs       20         $4,000

Total Incremental costs                                                  $30,000

Incremental net operating income(loss)                        $40,000

So, the financial advantage (disadvantage) Bharu for the year is $40,000.

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