Corn Company incurs a cost of $35 per unit, of which $20 is variable, to make a
ID: 2428565 • Letter: C
Question
Corn Company incurs a cost of $35 per unit, of which $20 is variable, to make a product that normally sells for $58. A foreign wholesaler offers to buy 6,000 units at $31 each. Corn will incur additional costs of $2 per unit to imprint a logo and to pay for shipping. Compute the increase or decrease in net income Corn will realize by accepting the special order, assuming Corn has sufficient excess operating capacity. (If amount decreases net income, use either a negative sign preceding the number eg -45 or parentheses eg (45).)reject accept net income increase or (decrease)
revenues
costs
net income
should corn accept the special order?
Explanation / Answer
Reject Accept Net income increase or (decrease) Revenues 0 186000 186000 Costs 0 -132000 -132000 Net income 0 54000 54000 Yes accept the special order