Zephram Corporation has a plant capacity of 200,000 units per month. Unit costs at capacity are:

Current monthly sales are 190,000 units at $30.00 each. Q, Inc., has contacted Zephram Corporation about purchasing 2,000 units at $24.00 each. Current sales would not be affected by the one-time-only special order. What is Zephram's change in operating profits if the one-time-only special order is accepted?
A) $14,800 increase
B) $22,000 increase
C) $17,200 increase
D) $33,200 increase

Question

Zephram Corporation has a plant capacity of 200,000 units per month. Unit costs at capacity are:

Current monthly sales are 190,000 units at $30.00 each. Q, Inc., has contacted Zephram Corporation about purchasing 2,000 units at $24.00 each. Current sales would not be affected by the one-time-only special order. What is Zephram's change in operating profits if the one-time-only special order is accepted?
A) $14,800 increase 
B) $22,000 increase 
C) $17,200 increase 
D) $33,200 increase

Quizplus · Accepted Answer

The Answer is A

Zephram Corporation Has a Plant Capacity of 200,000 Units Per