Company change in profits if the order is accepted, Accounting Basics

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Company change in profits if the order is accepted

Missouri company has a current production capacity level of 200,000 units per month. At this level of production, variable costs are $0.50 per unit and fixed costs are $0.50 per unit. Current monthly sales are 173,000 units. Gates company has contacted Missouri company about purchasing 20,000 units at $1.00 each. Current sales would not be affected by the special order and no additional fixed costs would be incurred on the special order. Missouri company's change in profits if the order is accepted will be a ______

a. $20,000 increase

b. $20,000 decrease

c. $10,000 increase

d. $10,000 decrease

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Accounting Basics: Company change in profits if the order is accepted

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Accounting Basics: Company change in profits if the order is accepted

Reference No:- TGS081454

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Accounting Basics: Company change in profits if the order is accepted

Reference No:- TGS081454

Recent Questions Asked Accounting Basics

Q : Cash dividends from stocks

Q : College graduate trying to save for his retirement

Q : Unamortized bond discount problem

Q : Problem based on marginal tax bracket

Q : Company change in profits if the order is accepted

Q : Equipment that will be used in business operations

Q : Variance and revenue spending variance problem

Q : Average issue price of each type of preferred stock

Q : Total costs to be assigned to inventory

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