Rylan Corporation received an offer from an exporter for 25,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: What is the amount of the income or loss from acceptance of the offer?
A) $125,000 loss
B) $25,000 income
C) $125,000 income
D) $25,000 loss

Question

Rylan Corporation received an offer from an exporter for 25,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:  What is the amount of the income or loss from acceptance of the offer?
A) $125,000 loss 
B) $25,000 income 
C) $125,000 income 
D) $25,000 loss

Quizplus · Accepted Answer

The income from the acceptance of the offer can be calculated as follows:

25,000 units x $16 per unit = $400,000

Since accepting the offer will not affect normal production or domestic sales prices, the income from the offer is a net gain of $400,000. Therefore, the correct answer is C, $125,000 income.

Rylan Corporation Received an Offer from an Exporter for 25,000