Nebraska Company produces and sells 20,000 units at $20 per unit.Nebraska Company's product cost is calculated as follows: A total of 500 setups at a cost of $120 per setup are required to produce the 20,000 units.Nebraska Company has received a special order to sell 5,000 units at $10 per unit.Nebraska Company has excess capacity available,but these 5,000 units would require 60 setups.If Nebraska Company accepts the special order,what is Nebraska's increase in net income?
A)decrease $5,000
B)increase $20,000
C)increase $5,000
D)increase $2,800

Question

Nebraska Company produces and sells 20,000 units at $20 per unit.Nebraska Company's product cost is calculated as follows:  A total of 500 setups at a cost of $120 per setup are required to produce the 20,000 units.Nebraska Company has received a special order to sell 5,000 units at $10 per unit.Nebraska Company has excess capacity available,but these 5,000 units would require 60 setups.If Nebraska Company accepts the special order,what is Nebraska's increase in net income?
A)decrease $5,000 
B)increase $20,000 
C)increase $5,000 
D)increase $2,800

Quizplus · Accepted Answer

The Answer of Nebraska Company produces and sells 20,000 units at $20 per unit.Nebraska Company's product cost is calculated as follows:  A total of 500 setups at a cost of $120 per setup are required to produce the 20,000 units.Nebraska Company has received a special order to sell 5,000 units at $10 per unit.Nebraska Company has excess capacity available,but these 5,000 units would require 60 setups.If Nebraska Company accepts the special order,what is Nebraska's increase in net income?
A)decrease $5,000 
B)increase $20,000 
C)increase $5,000 
D)increase $2,800

Nebraska Company Produces and Sells 20,000 Units at $20 Per