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Bonder Company Makes a Variety of Paper Products No Variable Marketing Costs Would Be Incurred on the Order

Question 3

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Bonder Company makes a variety of paper products.One product is printer paper,packaged 2,000 sheets to a box.One box normally sells for $30 A large bank offered to purchase 5,000 boxes at $26 per box.Costs per box are as follows:  Direct materials $128 Direct labour 53 Variable overhead 21 Fixed overhead 65\begin{array}{lr}\text { Direct materials } & \$ 128 \\\text { Direct labour } & 53 \\\text { Variable overhead } & 21 \\\text { Fixed overhead } & 65\end{array} No variable marketing costs would be incurred on the order.The company is operating significantly below the maximum production capacity.No fixed costs are avoidable.Which of the following represents the solution?


A) Do not accept the order because income will decrease by $35,000.
B) Do not accept the order because income will decrease by $5,000.
C) Accept the order because income will increase by $35,000.
D) Accept the order because income will increase by $5,000.

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