Chocolate Company currently has excess capacity. A special order for 5,000 units is received at a price of $13 per unit. Currently, production and sales are anticipated to be 20,000 units without considering the special order. Budget information for the current year follows. $\begin{array}{lccc}
\text { Sales } & \$ 300,000 \
\text { Less: Cost of goods sold } & \underline{ 160,000 } \
\text { Gross margin } & \underline{\$140,000 }
\end{array}$
Cost of goods sold includes $20,000 of fixed manufacturing cost. If the special order is accepted, the company's income will:

Question

Chocolate Company currently has excess capacity. A special order for 5,000 units is received at a price of $13 per unit. Currently, production and sales are anticipated to be 20,000 units without considering the special order. Budget information for the current year follows. $\begin{array}{lccc}
  \text { Sales } & \$ 300,000 \
 \text {  Less: Cost of goods sold } &  \underline{ 160,000 } \
\text { Gross margin } & \underline{\$140,000 }
\end{array}$
 Cost of goods sold includes $20,000 of fixed manufacturing cost. If the special order is accepted, the company's income will:

Quizplus · Accepted Answer

The Answer of Chocolate Company currently has excess capacity. A special order for 5,000 units is received at a price of $13 per unit. Currently, production and sales are anticipated to be 20,000 units without considering the special order. Budget information for the current year follows. $\begin{array}{lccc}
  \text { Sales } & \$ 300,000 \
 \text {  Less: Cost of goods sold } &  \underline{ 160,000 } \
\text { Gross margin } & \underline{\$140,000 }
\end{array}$
 Cost of goods sold includes $20,000 of fixed manufacturing cost. If the special order is accepted, the company's income will:

Chocolate Company Currently Has Excess Capacity Cost of Goods Sold Includes $20,000 of Fixed Manufacturing Cost