The manager at the Plymouth Manufacturing Company reported a current production level of 22,000 units per month.The managerial accountant reported the following unit-level costs:

The manager reported monthly sales of 20,000 units.The Salem Company contacted the manager at Plymouth Manufacturing and inquired about the purchase of 1,525 units at $2.10 per unit.The manager noted that current sales would not be affected by the one-time-only special order,and variable marketing/distribution costs would not be incurred with the special order.What is the change in operating profits at Plymouth Manufacturing Company's if the special order is accepted?
A)$1,525 decrease
B)$1,525 increase
C)$1,784.25 decrease
D)$1,784.25 increase
E)There is no change in operating profits

Question

The manager at the Plymouth Manufacturing Company reported a current production level of 22,000 units per month.The managerial accountant reported the following unit-level costs:

The manager reported monthly sales of 20,000 units.The Salem Company contacted the manager at Plymouth Manufacturing and inquired about the purchase of 1,525 units at $2.10 per unit.The manager noted that current sales would not be affected by the one-time-only special order,and variable marketing/distribution costs would not be incurred with the special order.What is the change in operating profits at Plymouth Manufacturing Company's if the special order is accepted?
A)$1,525 decrease 
B)$1,525 increase 
C)$1,784.25 decrease 
D)$1,784.25 increase 
E)There is no change in operating profits

Quizplus · Accepted Answer

[($0.30 + $0.45 + $0.18)] = $0.93
[1,525 × ($2.10 - $0.93)] = $1,784.25 increase

The Manager at the Plymouth Manufacturing Company Reported a Current