Golden Generator Supply is approached by Mr. Stephen, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Golden Generator Supply has excess capacity. The following per unit data apply for sales to regular customers:

If Golden Generator Supply accepts the order at $2640, what is the amount contributed towards fixed costs and profit on a sales order of 1600 units?
A) $384,000
B) $656,000
C) $1,232,000
D) $992,000

Question

Golden Generator Supply is approached by Mr. Stephen, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. Golden Generator Supply has excess capacity. The following per unit data apply for sales to regular customers:

If Golden Generator Supply accepts the order at $2640, what is the amount contributed towards fixed costs and profit on a sales order of 1600 units?

If Golden Generator Supply accepts the order at $2640, what is the amount contributed towards fixed costs and profit on a sales order of 1600 units?
A) $384,000 
B) $656,000 
C) $1,232,000 
D) $992,000

Quizplus · Accepted Answer

Contribution per unit = $410 ($2640 - $2230). Total contribution = $656,000 ($410 × 1600).

Golden Generator Supply Is Approached by Mr