Vodafone Company makes special equipment used in mobile network towers.Each unit sells for $400.Vodafone produces and sells 12,700 units per year.They have provided the following income statement data:

A foreign company has offered to buy 85 units for a reduced price of $300 per unit.The marketing manager says the sale will not negatively affect the company's regular sales.The sales manager says that this sale will require incremental selling and administrative costs,as it is a one-time deal.The production manager reports that there is plenty of excess capacity to accommodate the deal without requiring any additional fixed costs.If Vodafone accepts the deal,how will this impact operating profit?

Question

Vodafone Company makes special equipment used in mobile network towers.Each unit sells for $400.Vodafone produces and sells 12,700 units per year.They have provided the following income statement data:

A foreign company has offered to buy 85 units for a reduced price of $300 per unit.The marketing manager says the sale will not negatively affect the company's regular sales.The sales manager says that this sale will require incremental selling and administrative costs,as it is a one-time deal.The production manager reports that there is plenty of excess capacity to accommodate the deal without requiring any additional fixed costs.If Vodafone accepts the deal,how will this impact operating profit?

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The Answer of Vodafone Company makes special equipment used in mobile network towers.Each unit sells for $400.Vodafone produces and sells 12,700 units per year.They have provided the following income statement data:

A foreign company has offered to buy 85 units for a reduced price of $300 per unit.The marketing manager says the sale will not negatively affect the company's regular sales.The sales manager says that this sale will require incremental selling and administrative costs,as it is a one-time deal.The production manager reports that there is plenty of excess capacity to accommodate the deal without requiring any additional fixed costs.If Vodafone accepts the deal,how will this impact operating profit?

Vodafone Company Makes Special Equipment Used in Mobile Network Towers