Results of operations for the past year


Problem: A foreign company (whose sales will not affect X's market) offers to buy 2,000 units at $7.50 per unit. In addition to variable manufacturing costs, selling these units would increase overhead by $300 and selling and administrative costs by $800. If X accepts the offer, its profits will: Company X had the following results of operations for the past year: Sales (8,000 units at $10) $80,000 Direct materials and direct labour $48,000 Overhead 8,000 Selling and administrative expenses 16,000 72,000 Operating income $ 8,000 A foreign company (whose sales will not affect X's market) offers to buy 2,000 units at $7.50 per unit. In addition to variable manufacturing costs, selling these units would increase overhead by $300 and selling and administrative costs by $800. If X accepts the offer, its profits will:

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Accounting Basics: Results of operations for the past year
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