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Bell Supply House Produces Recycled Paper That It Sells by the Case.Budgeted

Question 64

Multiple Choice

Bell Supply House produces recycled paper that it sells by the case.Budgeted amounts for the coming year are as follows:  Revenues (20,000 cases at $12 each)  $240,000 Direct material $40,000 Direct labor 70,000 Variable manufacturing overhead 50,000 Fixed manufacturing overhead 30,000190,000 Net income 50,000\begin{array}{lr}\text { Revenues (20,000 cases at } \$ 12 \text { each) } &&\$240,000 \\\text { Direct material } & \$ 40,000 \\\text { Direct labor } & 70,000 \\\text { Variable manufacturing overhead } & 50,000 \\\text { Fixed manufacturing overhead } & 30,000 &190,000\\\text { Net income }&&50,000\end{array} LTS Enterprises has offered to purchase 2,000 cases of the paper from Bell at a price of $12.50 per case.This special order will have additional variable costs of $0.35 per case due to delivery costs.Bell Supply House has the capacity to produce this order and it will not affect any of its other operations.How much is the incremental revenue associated with accepting this special order?


A) $8,300
B) $25,000
C) $165,000
D) $9,000

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